Silk Laser share price rockets 25% following Wesfarmers takeover bid

Man pointing at a blue rising share price graph.Man pointing at a blue rising share price graph.

The share price of Silk Laser Australia Ltd (ASX: SLA) is soaring on the back of a $169 million bid from S&P/ASX 200 Index (ASX: XJO) giant Wesfarmers Ltd (ASX: WES).

As The Motley Fool Australia reported earlier, a subsidiary of the Bunnings owner offered to pay $3.15 per share to take over the company – one of Australia and New Zealand’s largest non-surgical aesthetics clinic operators.

The Silk Laser share price has rocketed 25.2% on the news to trade at $3.03 at the time of writing. That marks a new 52-week high for the stock.

Meanwhile, the Wesfarmers share price has risen 0.6% to trade at $51.905 in early Thursday trade. That compares to the ASX 200’s 0.01% slump.

Let’s dive into the key details of the acquisition proposal put to the ASX small cap stock.

Wesfarmers bids $169 million for Silk Laser

The Silk Laser share price is leaping after the company revealed a $3.15 per share, all cash acquisition offer – a 30% premium to the stock’s previous close.

The bid comes from Australian Pharmaceutical Industries (API). API was itself acquired by Wesfarmers a little over 12 months ago.

The Silk Laser board seems to think the $3.15 bid is fair. It’s granted API access to its books to conduct due diligence.

It also intends to recommend shareholders vote in favour of the takeover, subject to an independent expert finding it’s in shareholders’ best interests.

Silk Laser founder and managing director Martin Perelman commented on the bid, saying:

SILK has grown from a single store in South Australia, to listing on the ASX a few short years ago, growing the network to more than 140 stores today. The SILK Board has determined that it is in the best interests of shareholders to engage with API.

WAM Capital Limited (ASX: WAM) – which holds 9.3% of the takeover target – has shaken on a conditional agreement with API to vote its stake in favour of the deal.

Silk Laser share price snapshot

The bid comes in nearly 4% higher than the Silk Laser share price’s new 52-week high.

However, it will still see those who jumped on board the company at its 2020 initial public offering (IPO) out of pocket.

It sold around 5.8 million shares for $3.45 apiece prior to floating on the ASX in December that year.

The stock has more than halved since peaking at $5.20 in March 2021. It’s gained 27% so far this year and has fallen 14% over the last 12 months.

The post Silk Laser share price rockets 25% following Wesfarmers takeover bid appeared first on The Motley Fool Australia.

FREE Guide for New Investors

Despite what some people may say – we believe investing in shares doesn’t have to be overwhelming or complicated…

For over a decade, we’ve been helping everyday Aussies get started on their journey.

And to help even more people cut through some of the confusion “experts’” seem to want to perpetuate – we’ve created a brand-new “how to” guide.

Yes, Claim my FREE copy!
*Returns as of April 3 2023

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];[property] = defaultValue;

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

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 has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Silk Laser Australia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s