The Australian Pharmaceutical Industries Ltd (ASX: API) share price is starting the week on a positive note.
In morning trade, the pharmacy chain operator and distributor's shares are up 3% to $1.53.
Why is the API share price rising today?
Investors have been bidding the API share price higher today after it provided an update on the Wesfarmers Ltd (ASX: WES) takeover proposal.
According to the release, API has accepted a $1.55 cash per share offer from Wesfarmers to acquire 100% of the shares it does not already own via a scheme of arrangement. This will be reduced by any dividends that API pays between now and closing.
This offer represents a 35.4% premium to the undisturbed closing API share price on 9 July 2021 (prior to Wesfarmers' first offer of $1.38 per share).
What's the latest?
The API Board is unanimously recommending that shareholders vote in favour of the scheme. This is in the absence of a superior proposal and subject to the independent expert's report.
Each director intends to vote all of the API shares held or controlled by them in favour of the deal.
Though, the release highlights that there are a few customary conditions that require satisfying before the deal completes. These include API shareholder approval, court approval, ACCC approval, no material adverse change, and no prescribed occurrences. Two things the deal is not subject to are due diligence and financing.
A scheme meeting of API shareholders is expected to be held in the first quarter of calendar year 2022. If approved, the scheme will then be implemented shortly after and API will form the basis of a new healthcare division of Wesfarmers.
Following today's gain, the API share price has now climbed 21% since the start of the year.
