Who will end up owning Australian Pharmaceutical Industries Ltd (ASX: API) has been one of the biggest questions on the markets over the past year or so. API, the company behind the Priceline chain of pharmacies, has been sought after by both Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW). Now, it looks as though it will be Wesfarmers shares that will end up with API alongside them.
The ASX 200 industrial and retail conglomerate has lobbed a series of bids API's way over the past 12 months. The most recent (and perhaps winning) bid being $1.55 per API share. But these were turned into a bidding auction or sorts when Woolies entered the fray with a higher bid of $1.75 per share. But the grocery giant bowed out of the courtship at the start of this year. As such, this leaves Wesfarmers as the only company that looks like it will take API's hand.
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Wesfarmers shares looking set to take in API
This merger took another step forward today as well. Hence why the Wesfarmers share price was in focus. As revealed by the Australian Financial Review (AFR) today, 97% of the proxy votes received by both API and Wesfarmers thus far have been in affirmation of the takeover. The vote closes tomorrow. These positive votes included some major institutional investors. These included Investors Mutual. Investors Mutual has a 4.2% stake in API, so its vote has obvious sway.
Another major API investor in Australian Ethical Investments Ltd (ASX: AEF) has reportedly already given its own green light.
According to the report, API shareholders' votes "were understood to be nearly 90 percent favouring [the] deal". This, together with the already-mentioned blessings of Wesfarmers shareholders, "make the scheme irrevocable".
So it looks as if Wesfarmers is set to add yet another retail business to its bulging portfolio of brands. Wesfarmers already owns K-Mart, OfficeWorks and (of course) Bunnings.
The Wesfarmers share price had a positive day today, recording a gain of 0.32% by market close at $50.64 a share. That gives this ASX 200 blue-chip share a market capitalisation of $57.42 billion, with a dividend yield of 3.36%.
