The Wesfarmers Ltd (ASX: WES) share price has had a rough time recently and investors have it firmly on watch.
In early trade this morning, the Wesfarmers share price is in positive territory. It's up 0.96% to $55.84.
So, why are investors paying such close attention to the Wesfarmers share price?
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Investors waiting for Wesfarmers to make next move on API
The Wesfarmers share price has been rocked by various events in this past week.
Most notably was the news of a rival bid for Australian Pharmaceutical Industries Ltd (ASX: API).
Listed pharmaceutical company Sigma Healthcare Ltd (ASX: SIG) entered the race with a bid for 100% of API shares at $1.57 per share.
Sigma's offer includes cash of 35 cents per share and 2.05 Sigma shares per API share.
By comparison, Wesfarmers recently sweetened its bid to acquire API, tabling an offer of $1.55 per share under a revised scheme arrangement.
As a result, a bidding war has emerged with both Sigma and Wesfarmers simultaneously undertaking due diligence.
The higher bid from Sigma has awakened speculation that Wesfarmers could lob a higher cash bid.
Interestingly, API's major shareholder Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) could have a role to play.
Soul Patts has agreed to vote its 19.3% shareholding in API in favour of Wesfarmers' revised proposal.
As a result, the conglomerate has the right to exercise a call option if it matches a bid by Sigma.
However, there remains uncertainty as to what form an equivalent offer could take.
More on the Wesfarmers share price
Up until recently, the Wesfarmers share price was having a stellar year.
However, in the past month shares in the conglomerate have fallen more than 16% from their record highs.
The main catalyst can be attributed to the conglomerate's full-year report.
Despite delivering solid growth in FY21, Wesfarmers flagged that earnings in the group's retail businesses for the first half of FY22 may be below the prior corresponding period.
As a result, investors may be questioning the outlook for shares in Wesfarmers.
