Insights

Wesfarmers (ASX:WES) share price wobbles amid rival bid for API

A bidding war for Australian Pharmaceutical Industries has begun.
The post Wesfarmers (ASX:WES) share price wobbles amid rival bid for API appeared first on The Motley Fool Australia. –

The Wesfarmers Ltd (ASX: WES) share price is wobbling today amid news a rival bid has been placed for Australian Pharmaceutical Industries Ltd (ASX: API).

The fresh takeover offer comes only weeks after Wesfarmers upped its bid for 100% of API’s shares to $1.55 of cash per share, valuing the company at around $764 million.

This morning, Sigma Healthcare Ltd (ASX: SIG) posted a mostly-scrip bid for 100% of API shares. This offer has an implied value of $1.57 per share – indicating Sigma values API at approximately $773 million.

The Wesfarmers share price has spent most of the morning in the red after the news, but it has since regained ground. At the time of writing, the company’s shares have gained 0.16% to trade at $57.45 apiece.

Let’s take a closer look at the bidding war that’s erupted over the operator of Priceline.

Bidding war for API begins

The Wesfarmers share price has had a turbulent start to the week amid the emergence of a new competitor for API.

Wesfarmers and Sigma are now simultaneously undergoing due diligence to win the pharmaceutical company.

Sigma has put a higher bid to API’s board, albeit a mostly scrip one. Sigma’s proposal would see API’s shareholders walking away with 35 cents of cash and 2.05 Sigma shares per API share they hold at the time of the demerger.

As the Sigma share price finished Friday’s session trading at 59.5 cents, the implied value of Sigma’s merger offer is $1.57 per share.

Additionally, Sigma has found at least $45 million worth of annual synergies that could be realised if it merged with API.

At this stage, API’s board has determined that Sigma’s proposal is superior to Wesfarmers’ $1.55 per share takeover offer.

What’s on the table from Wesfarmers?

Wesfarmers’ bid of approximately $773 million was the retail giant’s second for API. API turned down Wesfarmers’ previous offer of $1.38 per share in July.

The Wesfarmers share price fell 0.2% after that knockback but gained 0.5% on the back of its most recent bid.

Further, Wesfarmers previously secured the vote of API’s major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), which holds 19.3% of API’s stock.

Now, Wesfarmers has a head start on due diligence for API. Its due diligence period expires on 16 October.

Wesfarmers share price snapshot

Those interested in the Wesfarmers share price will likely be watching the company closely in the coming weeks.

Shares in the company have gained 11% so far this year and are trading 26% higher than this time last year.

The post Wesfarmers (ASX:WES) share price wobbles amid rival bid for API appeared first on The Motley Fool Australia.

Should you invest $1,000 in Wesfarmers right now?

Before you consider Wesfarmers, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Wesfarmers wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Why AVZ, Flight Centre, Fortescue, & Sigma shares are storming higher

Woolworths (ASX:WOW) and Coles (ASX:COL) could face a margin shock
ASX 200 (ASX:XJO) midday update: Fortescue jumps, Wesfarmers dealt takeover blow

API (ASX:API) share price heats up as bidding war begins
What is the outlook for the Wesfarmers (ASX:WES) share price

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!