:Retail conglomerate Wesfarmers Ltd said on Thursday it had bought the entire stake of Australian Pharmaceutical Industries Ltd's largest shareholder in an attempt to thwart a rival suitor's bid to snap up the pharmacy chain.
The stake buy comes weeks after Sigma Healthcare swooped in with a AUS$773.5 million (US$562.72 million) bid https://www.reuters.com/article/us-api-m-a-sigma-healthcare-idUSKBN2GM0NC for API that the company considered to be "more favourable" to its shareholders than Wesfarmers' revised offer in September.
Now armed with the 19.3per cent API stake purchased from Washington H Soul Pattinson Co, Wesfarmers said it would not back Sigma's AUS$1.57 per share stock-plus-cash bid against its own cash offer of AUS$1.55 a share.
"Exercising our option to acquire 19.3per cent of API reflects the group's commitment to the transaction and the continued progress of the Wesfarmers' proposal," Managing Director Rob Scott said.
API declined to comment and Sigma Chairman Ray Gunston said his company continues to consider its proposal superior to Wesfarmers'.
Jefferies said in a note after the stake buy announcement that the purchase would make it very difficult for the Sigma proposal to succeed.
Sigma offered to buy API through a scheme of arrangement that would require 75per cent of votes in favour of the deal.
API shares ended 1.7per cent higher, while Sigma closed flat.
Both Wesfarmers and Sigma were given access to API's books for due diligence.
(US$1 = 1.3746 Australian dollars)
(Reporting by Indranil Sarkar in Bengaluru, additional reporting by Nikhil Kurian Nainan and Harish Sridharan; Editing by Subhranshu Sahu)