Wesfarmers to buy API (ASX:API) after Woolworths pulls offer

Woolworths (ASX:WOW) has pulled out its offer for Australian Pharmaceutical Industries (ASX:API) after completing due diligence on the company.

Woolworths proposed to buy the Priceline owner with a cash offer deal of $1.75 a share. After due diligence, the retail giant said they have not been able to validate the financial returns it requires in line with the group’s capital allocation framework.

“We are grateful to the board and leadership team of API for their constructive engagement and support throughout the due diligence process,” said Woolworths chief executive Brad Banducci.

API has already entered into a scheme implementation deed with Wesfarmers (ASX:WES) after receiving $1.55 a share deal and is on track to complete in the first quarter this year.

Shares in Woolworths (ASX:WOW) is flat at $37.43, shares in Australian Pharmaceutical Industries (ASX:API) are trading 11.6 per cent lower at $1.53, while shares in Wesfarmers (ASX:WES) are trading 1.6 per cent higher at $59.