Woolworths offers $872m to snap up Priceline’s owner API

Holly HalesNCA NewsWire
Priceline’s owner could soon be snapped up by Woolworths.
Camera IconPriceline’s owner could soon be snapped up by Woolworths. Credit: News Regional Media

Woolworths has positioned itself as a contender to snap up Priceline’s owner API in what could be a lucrative $870m deal.

But the supermarket giant’s surprising move into the pharmacy space isn’t likely to mean an amalgamation of stores.

Shareholders were told on Thursday morning of the group’s offer to buy all of API’s shares at $1.75 a pop, a business valuation of $872m.

The offer resulted in a 14 per cent hike in API’s share price, up to $1.70, later on Thursday morning.

In addition to Priceline, API is also the parent company of Soul Pattinson Chemist and Pharmacist Advice brands among others.

It comes after Wesfarmers offered API $1.55 per share in July, placing them in a likely position to seal the deal after pharmacy competitor Sigma withdrew their bid.

PRICELINE STOCKS
Camera IconA Priceline store in William St Melbourne is one of many across Australia. NCA NewsWire / David Geraghty Credit: News Corp Australia

It’s unclear what the change will mean for shoppers, but Woolworths says it’s committed to keeping a “community pharmacy model”.

Chief executive Brad Banducci explained how the deal would be a “fantastic addition” to the company’s “everyday needs ecosystem”.

“If successful, we will continue to support API’s community pharmacy partners to deliver better experiences for both customers and pharmacists,” he said.

“We are strongly committed to supporting the community pharmacy model, including pharmacy ownership and location rules, to ensure pharmacies are well represented in all communities, especially in regional and remote parts of Australia.”

Supplied  Woolworths Marrickville Metro Sydney store front exterior. Generic
 supermarket frontage image. Su
Camera IconWoolworths says it’s committed to keeping a ‘community pharmacy model’. Dallas Kilponen/PPR Credit: Supplied

However, union The Pharmacy Guild of Australia was less sure about the pending deal, saying in a statement it had a “number of questions surrounding this bid”.

“Why is a company with interests in the alcohol, tobacco, gambling and nightclub industries wanting to move into healthcare?” the statement read.

“How does it hope to convince Australians that it is serious about their health and welfare?”

The supermarket giant’s bid is still non-binding and subject to regulator approval.

Originally published as Woolworths offers $872m to snap up Priceline’s owner API

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