Sunday, October 17, 2021

Australia’s Wesfarmers moves to block Sigma’s offer for API

:Australian retail conglomerate Wesfarmers Ltd said on Thursday it bought a 19.3per cent stake in Australian Pharmaceutical Industries Ltd (API), in an attempt to block Sigma Healthcare Ltd’s rival proposed offer.

“Given Wesfarmers’ commitment to progress its own proposal to acquire API, Wesfarmers does not intend to support or vote its 19.3per cent API shareholding in favour of the Sigma proposal,” the company said in a statement.

Sigma offered last month to buy API, valuing the pharmaceutical company at AUS$773.5 million (US$562.72 million). API said it was in the best interests of its shareholders.

But Wesfarmers exercising an option to buy 19per cent shareholding in API makes Sigma’s proposal difficult to go through.

Sigma had offered to buy API via a scheme of arrangement, which would require at least 75per cent of shares voted in favour at a shareholder meeting.

Wesfarmers’ stake acquisition would make it very difficult for the Sigma proposal to succeed as its stands, analysts at Jefferies wrote in a note.

Wesfarmers acquired the 95.1 million shares from Washington H Soul Pattinson Co, which had earlier indicated its support for Wesfarmers’ proposal.

API shares were up 1.7per cent at AUS$1.53 in early trade, falling slightly short of Wesfarmers’ sweetened bid from last month of AUS$1.55 per share.

(US$1 = 1.3746 Australian dollars)

(Reporting by Indranil Sarkar in Bengaluru; Editing by Subhranshu Sahu)

This article originally appeared on the CNA
Source link Author on date 2021-10-06 23:04:21

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