Wesfarmers (ASX:WES) reportedly looking to buy cancer care provider

In today’s talk of the town, Wesfarmers might be taking its first steps into the healthcare sector

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Rumours are swirling that a major healthcare provider will soon be going to auction, with ASX big-wig Wesfarmers Ltd (ASX: WES) mentioned as a potential buyer.

The Wesfarmers share price has fallen slightly on the news. At the time of writing, Wesfarmers shares are $57.79 – 0.56% lower than their closing price yesterday.

The broader market isn’t fairing much better today. Currently, the S&P/ASX 200 Index (ASX: XJO) is down 0.24%.

Let’s take a look at the rumours surrounding the diversified conglomerate today.

Rumours of a major acquisition

According to The Australian, investment banks claim Wesfarmers is in the running to purchase Australia’s largest cancer care provider, Icon Group.

If it were to go ahead, Wesfarmers’ acquisition of Icon Group would be its first foray into the healthcare sector.

In a recent research report, Goldman Sachs noted Wesfarmers has been eyeing new acquisitions.

Wesfarmers is said to have billions burning a hole in its pocket after selling off part of its stake in Coles Group Ltd (ASX: COL) early last year.

According to The Australian, Icon Group will likely sell for more than $2 billion.

Headquartered in Brisbane, Icon Group has expanded its business from Australia to Singapore, Hong Kong, China, and New Zealand.

The group was formed in 2015. It was purchased by a consortium including Goldman Sachs Principal Investment Area, Queensland Investment Corporation, and Pagoda Investments in 2017. The purchase reportedly cost the consortium $1.2 billion.

Last night, The Australian reported global buyout fund Brookfield, unnamed Canadian pension funds, and New Zealand’s infrastructure investor Morrison & Co are also in the running for the acquisition. Previously, the publication has claimed Ramsay Health Care Limited (ASX: RHC) is a contender for the purchase.

Goldman Sachs and Jefferies Australia are said to be heading the sale which will reportedly go ahead in July or August.

Wesfarmers share price snapshot

The Wesfarmers share price has been performing well on the ASX lately.

Currently, shares in Wesfarmers are about 12% higher than they were at the start of this year. They have also gained almost 32% since this time last year.

The ASX giant has a market capitalisation of around $65.9 billion, with approximately 1.1 billion shares outstanding.

Should you invest $1,000 in Wesfarmers right now?

Before you consider Wesfarmers, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Wesfarmers wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool Australia has recommended Ramsay Health Care Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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