Wesfarmers seems to have won the hearts and minds of the board and major shareholders of Australian Pharmaceutical Industries (API) with a lift in its proposed offer price from $1.38 cash to $1.55 a share.
In a statement to the ASX on Thursday morning before trading opened, API revealed the higher offer and the change of heart.
“Today, API announces that it has received a revised non-binding indicative proposal from Wesfarmers to acquire 100% of the shares in API, by way of a scheme of arrangement, for cash consideration of $1.55 per share.
“The Revised Indicative Proposal provides for the payment of fully franked dividends of up to a maximum of 5 cents per share, including any final dividend for the financial year ended 31 August 2021. The cash component of any such dividends will reduce the cash consideration accordingly.”
The higher price lifts the premium to API’s pre bid share price to 35%. The bid is conditional on approvals from regulators and due diligence, as well as shareholders in a scheme of arrangement vote.
In its statement, the API board signalled its change of heart and reserved its previous rejection of the $1.38 a share offer.
“Following careful consideration and consultation with its advisers, the API Board has determined that it is in the interests of API’s shareholders to progress the Revised Indicative Proposal and allow Wesfarmers to undertake confirmatory due diligence.
The Board unanimously intends to recommend the Revised Indicative Proposal to shareholders (at the offer price of $1.55 per share), subject to:
- The parties entering into a binding SID on terms no less favourable to API’s shareholders than the Revised Indicative Proposal following completion of Wesfarmers’ confirmatory due diligence;
- No superior proposal being received; and
- An independent expert concluding (and continuing to conclude) that the RevisedIndicative Proposal is in the best interests of API shareholders.
“This revised offer better reflects the strength and potential of our stable of businesses that have been built by the efforts and passion of all of our people within API. Aligned with our vision of “enriching life”, we remain firmly focused on making a difference for all our customers and trading partners,” API’s CEO and Managing Director, Mr Richard Vincent said in Thursday’s statement.
