Wesfarmers (ASX:WES) blocks out Sigma bid after snapping up Soul Patts stake in API

Wesfarmers (ASX:WES) snapped up their 19.3 per cent share in Priceline owner Australian Pharmaceutical Industries (ASX:API) in a bid to block out the owner behind the Amcal and Guardian brands, Sigma (ASX:SIG).

The battle between the retail giants heated up after the owner behind the Amcal and Guardian brands, Sigma (ASX:SIG) made a $773.5 million bid to API. This came after Wesfarmers revised their offer to $770 million after the API board rebuffed the initial offer of $760 million.

The moves saw the owner of Bunnings and Officeworks acquire Washington H Soul Pattinson’s (ASX:SOL) 95.1 million shares in API at $1.38 a share, with future payments based on what Soul Patts ends up offering API.

Despite Sigma’s offer being superior to Wesfarmers, the move from Wesfarmers prevents Sigma entering into talks with API’s largest shareholder, Soul Patts.

Wesfarmers managing director Rob Scott said that the Wesfarmers proposal would deliver an attractive premium and certain cash return to API shareholders. “Wesfarmers continues to see opportunities to invest in and strengthen the competitive position of API and its community pharmacy partners. Exercising our option to acquire 19.3 per cent of API reflects the Group’s commitment to the transaction and the continued progress of the Wesfarmers proposal”.

Shares in Wesfarmers (ASX:WES) are trading 0.6 per cent higher at $54.40, while shares in Washington Soul Patts (ASX:SOL) are trading 0.6 per cent lower at $35.96, while shares in Sigma (ASX:SIG) are trading 0.4 per cent higher at $0.57.