Competition between Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW) has burst into an inferno as the pair go head to head to take over the owner of Priceline.
The latter retail giant lobbed a bid for Australian Pharmaceutical Industries Ltd (ASX: API) yesterday. Its offer surpasses Wesfarmers' longstanding takeover bid by 12.9%.
At the time of writing, the Wesfarmers share price is $57.38, 0.76% lower than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.02%.
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Wesfarmers back in the ring to take over API
Wesfarmers is once again in a surprise battle to win all API's remaining shares despite its takeover offer having already been accepted by the pharmaceutical company.
API agreed to go ahead with Wesfarmers' $763 million acquisition offer earlier this month after fellow pharmaceutical company Sigma Healthcare Ltd (ASX: SIG) redacted its takeover offer.
But that could all be upset now Woolworths has outbid Wesfarmers by more than $100 million.
Both companies are looking to acquire the company – which would see them owning Priceline stores. Thus, it would see the winner expanding into the growing health, wellbeing, and beauty market.
However, Woolworths' inclusion in the battle for the pharmaceutical giant has raised the eyebrows of the Pharmacy Guild of Australia.
A spokesperson for the guild said it's looking forward to "having many conversations with the Woolworths team as well as with Prime Minister Scott Morrison and Leader of the Opposition Anthony Albanese" regarding Woolworths' potential takeover. They questioned:
Why is a company with interests in the alcohol, tobacco, gambling, and nightclub industries wanting to move into healthcare?
How does it hope to convince Australians that it is serious about their health and welfare?
How will it ensure the successful community pharmacy model, which is custodian of the PBS (Pharmaceutical Benefits Scheme), is protected and maintained?
Woolworths Group CEO Brad Banducci has stated the company would be committed to supporting API's community pharmacy partners. It will also ensure all Australians have access to a full range of PBS and other medicines. He also commented:
Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem.
All eyes will be on Wesfarmers and Woolworths – and their share prices – as the retail giants battle to get a foothold in the increasingly lucrative market.
