ASX 200 midday update: Wesfarmers makes API takeover bid, BHP & Rio Tinto rising

The ASX 200 is on the rise on Monday…

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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is storming higher. The benchmark index is currently up 0.85% to 7,334.9 points.

Here’s what is happening on the ASX 200 on Monday:

Wesfarmers makes takeover offer

The Wesfarmers Ltd (ASX: WES) share price is edging higher on Monday. This follows news that the conglomerate has finally found a takeover target. That target is pharmacy chain operator and wholesale distributor Australian Pharmaceutical Industries Ltd (ASX: API). Wesfarmers has offered to acquire the Priceline Pharmacy owner for $1.38 cash per share. This represents a 21% premium to its last close price. Australian Pharmaceutical Industries’ major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), has agreed to vote in favour of the proposal.

Mining shares rise

BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares are pushing higher and playing a key role in driving the ASX 200’s strong gain. Both mining giants are up approximately 3% and 2%, respectively, at the time of writing. This has led to the S&P/ASX 200 Resources index rising a solid 2.3%

CBA shares downgraded

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today despite being the subject of a bearish broker note. According to the note, Macquarie has downgraded the banking giant’s shares to an underperform rating but lifted its price target to $88.50. The broker made the move largely on valuation grounds.

Best and worst ASX 200 performers

The Viva Energy Group Ltd (ASX: VEA) share price is the best performer on the ASX 200 with a gain of almost 4%. This morning Goldman Sachs reiterated its buy rating and $2.70 price target on the fuel company’s shares. The worst performer has been the Mercury NZ Ltd (ASX: MCY) share price with a 5% decline. This is despite there being no news out of the electricity company.

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Motley Fool contributor James Mickleboro 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 Washington H. Soul Pattinson and Company Limited and Wesfarmers 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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