ASX 200 rises, API soars, Wesfarmers up

The ASX 200 rose today. There was a takeover offer for API.

| More on:

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The S&P/ASX 200 Index (ASX: XJO) rose by 0.8% today to 7,334 points.

Here are some of the highlights from the ASX:

Wesfarmers Ltd (ASX: WES) offer for Australian Pharmaceutical Industries Ltd (ASX: API)

Wesfarmers announced today a non-binding, indicative proposal to buy the entire API business.

This offer was a 21% premium to API's last closing price.

API's largest shareholder, Washington H. Soul Pattinson and Co Ltd (ASX: SOL), which owns 19.3% of API, has agreed to vote in favour of the proposal and has granted a call option in respect of its API shares in favour of Wesfarmers.

Wesfarmers said it's well positioned to bring capital and unique capabilities to support investment that will strengthen the competitive position of API and its community pharmacy partners.

The Wesfarmers managing director Rob Scott said:

If the proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a base from which to invest and develop capabilities in the health and wellbeing sector.

The combination of Wesfarmers and API is a compelling opportunity to capitalise on API's strengths and positioning in these markets while drawing upon Wesfarmers' capabilities in retail and distribution, our strong balance sheet and our willingness to invest in our businesses for growth over the long-term.

API's board pointed out that the offer has been made at a time when COVID-19 restrictions have resulted in store and clinic closures and these have significantly affected operational performance. The board is undertaking an analysis on whether the offer is reflective of the long-term growth prospects of API and the expected short-term impacts of the pandemic lockdown restrictions.

Indeed, in a trading update that was also released today, it said that lockdowns in the current form beyond the end of July would impact profit by approximately $1 million of earnings before interest and tax (EBIT) per week of extension.

API is now expecting that its full year underlying EBIT will be in between $66 million to $68 million and its reported EBIT to be in the range of $31 million and $33 million.

The company also said that the build of its new Marsden Park distribution centre in north-west Sydney, at a cost of $50 million, remains on time and within budget. That automated distribution centre is expected to deliver a 20% improvement in cost per unit with annualised savings of around $8 million at the earnings before interest, tax, depreciation and amortisation (EBITDA) level, flowing from the start of FY23.

Healius Ltd (ASX: HLS)

The Healius share price rose slightly today. It announced an acquisition.

It is buying Axis Diagnostics, which the ASX 200 company described as a high-quality Queensland-based imaging business with EBITDA of approximately $2 million, consisting of three radiology practices located in growth areas near Brisbane and one practice in the Whitsundays.

Healius managing director and CEO Dr Malcolm Parmenter said:

The acquisition is in line with our business' network optimisation strategy, has been funded from cash and is earnings per share accretive. It complements and extends our existing footprint, grows revenue and capabilities, and deliver synergies with our facilities and national contracts.

Should you invest $1,000 in Healius Ltd right now?

Before you buy Healius Ltd shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Healius Ltd wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Man standing on rock next to turquoise salt lagoon.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 finally had a green session this hump day.

Read more »

gaming asx share price rise represented by slot machine paying jackpot
Broker Notes

What does Macquarie expect from Aristocrat Leisure shares when it reports on 14 May?

Here's what the broker is expecting from this gaming technology company next week.

Read more »

Man pointing at a blue rising share price graph.
Share Gainers

Guess which ASX 300 stock just rocketed 17%!

Investors are sending the ASX 300 stock soaring higher on Wednesday. But why?

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Aurizon, JB Hi-FI, Nuix, and Platinum shares are tumbling today

These shares are falling on hump day. But why?

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Firefly, Kelsian, NAB, and Zip shares are roaring higher today

These shares are having a good time on hump day. Let's find out why.

Read more »

A man and woman sit at a desk staring intently at a laptop screen with papers next to them.
Opinions

Where I'd invest $5,000 in ASX 300 shares right now

These stocks look like excellent investments today.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

Goldman Sachs says these ASX 200 stocks are strong buys

The broker is feeling very bullish about these stocks. But why?

Read more »