Own Wesfarmers shares? Here's how they performed last month

Wesfarmers shares had a month to forget in May.

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It's probably safe to say that Wesfarmers Ltd (ASX: WES) is one of the most popular ASX 200 shares on the share market. This industrial and retail conglomerate has been around for decades and owns some of the country's best-known retail outlets, such as Kmart, Officeworks and Bunnings.

But Wesfarmers' bevvy of other, smaller but diverse businesses makes it a rather unique share on the ASX. What other ASX share has interests ranging from Bunnings and Kmart to lithium, clothing and gas?

So given we've established how popular and wide-ranging Wesfarmers is as a company, let's take a look to see how the Wesfarmers share price fared over the month of May just gone.

Wesfarmers ended April at a share price of $51.97. But by the end of the month, the Wesfarmers share price had fallen to $47.67. That's a drop worth a rather nasty 8.27%. This loss was a significant underperformance of the broader S&P/ASX 200 Index (ASX: XJO), which also fell over May, but only by 3%.

You can see this illustrated below:

So what went so wrong for Wesfarmers shares last month?

Wesfarmers shares drop on the one that got away

Well, there was only one major development that involved Wesfarmers last month, and this may be responsible for the company's lacklustre performance over May. Back in April, Wesfarmers announced a proposal to acquire Silk Laser Australia Ltd (ASX: SLA) in its entirety for a price of $3.15 per share. Most investors assumed this was a done deal, until last month.

On 23 May, Silk Laser revealed that it had received a second, competing offer for its business. The company announced that it had also been approached by the Hong Kong-based EC Healthcare. EC Healthcare put up a much-improved $3.35 per share offer.

Silk has declared this bid superior, and it looks as though Wesfarmers isn't going to engage in a bidding war. That's because the 30 May deadline for Wesfarmers to respond has come and gone without a renewed bid from the company.

Wesfarmers investors seemed to be disappointed with this outcome, judging by the fact that most of the company's May share price losses occurred in the back half of the month when this saga was unfolding.

As such, it seems that Wesfarmers seemingly letting Silk Laser slip through its fingers is the major reason why this company had such a disappointing May. But even so, the Wesfarmers share price remains up by 5.6% in 2023 – an outcome which all shareholders can probably be happy with.


Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Silk Laser Australia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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