The Wesfarmers Ltd (ASX: WES) share price is on watch on Wednesday after the company reiterated its intent to win Australian Pharmaceutical Industries Ltd (ASX: API), despite facing major competition.
Woolworths Group Ltd (ASX: WOW) recently entered the battle to take over the Priceline owner, outbidding Wesfarmers by more than $100 million.
Today, Wesfarmers reminded the market of its 19.3% holding in API and vowed to vote its stake against the supermarket giant's takeover.
As of yesterday's close, the Wesfarmers share price is $58.41.
Let's take a closer look at today's announcement from the company.
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All eyes on the Wesfarmers share price
The Wesfarmers share price is in the spotlight this morning after the company announced it won't back down from its attempt to acquire API despite Woolworths' $872 million bid.
Wesfarmers states it believes its own $763 million bid is a superior proposal and confirmed it will be voting its shareholding, and "any other API shares that it may acquire" against the competitor.
The company also said its takeover will "significantly benefit community pharmacists and Priceline franchisees."
That might be a jab at Woolworths after the Pharmacy Guild of Australia questioned the company's intentions. In a statement, a Guild spokesperson asked:
Why is a company with interests in the alcohol, tobacco, gambling, and nightclub industries wanting to move into healthcare?
In today's release, Wesfarmers managing director Rob Scott said:
[W]e're confident our proposal supports community pharmacists and their businesses, for the long-term. Pharmacists face various competitive pressures and Wesfarmers is uniquely placed to support the growth of community pharmacies including Priceline franchisees.
Additionally, the company addressed potential data privacy issues.
Key stakeholders apparently voiced concerns that data from Priceline's Sister Club might be shared with Wesfarmers' 50%-owned Flybuys loyalty program. Flybuys is co-owned by Coles Group Ltd (ASX: COL), which was demerged from Wesfarmers in 2018.
The worries were due to an overlap of non-prescription products sold in both supermarkets and pharmacies.
However, Wesfarmers assures it will keep API data entirely separate from all supermarket-based loyalty programs. It noted:
This assurance provides API and its community pharmacists, including current and future Priceline franchisees, with comfort that their customer data will be protected from supermarket competitors.
Right now, the Wesfarmers share price is 13.4% higher than it was at the start of 2021. Though, it's only gained 0.7% since it posed its takeover offer to API in July.
