Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API

Female pharmacist smiles with a digital tablet.

The Wesfarmers Ltd (ASX: WES) share price finished in the green today amid news a rival bidder for Australian Pharmaceutical Industries Ltd (ASX: API) has backed down.

Sigma Healthcare Ltd (ASX: SIG) withdrew its takeover proposition for the Priceline owner this morning. That leaves Wesfarmers’ takeover bid of $1.55 per API share with no outstanding competition.

At today’s closing bell, the Wesfarmers share price was up 2.05% at $60.33.

For context, the S&P/ASX 200 Index (ASX: XJO) finished 0.39% higher.

Wesfarmers is the last entity standing

The Wesfarmers share price is gaining after Sigma’s $1.57 mostly-scrip offer to acquire API was scrapped.

The API board had previously stated Sigma’s offer was superior to the Wesfarmers bid. Sigma was granted due diligence following its bid in late September, 11 days after Wesfarmers was given the same.

It was yet another bump in the road for Wesfarmers’ plan to takeover API. The Priceline owner knocked back a $1.38 per share bid from Wesfarmers in July.

In what might have been an attempt to block a future takeover by Sigma, Wesfarmers increased its holding in API to 19.3% earlier last month.

It did so by exercising an agreement with Washington H Soul Pattinson and Co Ltd (ASX: SOL), allowing it to buy some of Soul Patts’ holding in API for $1.38 apiece. If Wesfarmers’ takeover proposition is successful, it will pay Soul Patts the 17 cent difference between the purchase price and Wesfarmers’ bid.

Now, however, the retail conglomerate is seemingly the last entity standing looking to takeover API.

Whether the news is the cause of the rise in the Wesfarmers share price today is impossible to say. Still, market watchers might want to keep an eye out for news on the ongoing due diligence Wesfarmers is still undergoing for API.

Wesfarmers’ bid represents a 5% premium on API’s current share price of $1.48.

Wesfarmers share price snapshot

Right now, Wesfarmers’ stock is trading for 17% more than it was at the start of 2021.

Its value has also gained 26% since this time last year.

The post Wesfarmers (ASX:WES) share price lifts as rival drops out of race for API appeared first on The Motley Fool Australia.

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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 Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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