The Wesfarmers Ltd (ASX: WES) share price lost momentum during November 2021.
In the first half of November, Wesfarmers shares rose by more than 5%. Indeed, between mid-October and mid-November the Wesfarmers shares had actually risen by 11%.
But the second half November saw the diversified retailer erase those gains over he second half of the month. It ended November 2021 essentially flat from where it was at the start of the month.
What's going on with the Wesfarmers share price?
It's the buyers and sellers of the month that decade how the share price performs.
There were a few interesting events that occurred last month.
On 8 November 2021, Wesfarmers announced that it had entered into a scheme implementation deed with Australian Pharmaceutical Industries Ltd (ASX: API) for a cash consideration of $1.55 per share. Wesfarmers currently owns a 19.3% shareholding of API.
The API board had unanimously recommended that API shareholders vote in favour of the scheme, though only if there wasn't a superior proposal.
Wesfarmers believes it has opportunities to invest and strengthen the competitive position of API and its community pharmacy partners by expanding ranges, improving supply chain capabilities and enhancing the online experience for customers. Wesfarmers thinks API can form the start of a health and beauty division.
The Wesfarmers share price will be in focus this week as Woolworths Group Ltd (ASX: WOW) has come in with a higher bid for the pharmacy business of $1.75 per API share, which is 12.9% higher than the Wesfarmers bid. Woolworths also said it's willing to explore potential alternative control transaction structure options such as a takeover bid with a minimum acceptance condition of 50.1% and/or other transaction structure that would be subject to receiving 50.1% of API shareholder support.
Broker thoughts on the Wesfarmers share price
Sometimes, investors may take into account what some of the leading brokers think about a business.
In mid-November, Citi released a note that still rated Wesfarmers as a sell because the broker thought that the Wesfarmers share price was too expensive. It thought that the takeover would add to the value of the overall business though.
Let's look at the earnings valuation from Citi on Wesfarrmers. The broker thinks the Wesfarmers share price is valued at 27x FY22's estimated earnings.
Latest trading update
When Wesfarmers held its AGM, it gave a trading update which said its retail businesses have been effective in managing the disruptions in the global supply chains and are well positioned with inventory for the Christmas trading period.
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