I agree with Fisherman's points, I have bought some stock now and I have left some cash free if it falls significantly back to its pre take over price. After yesterday's price drop it made me think on how this will pan out. In my opinion, the synergies with WES systems are obvious and the pharmacy sector is hard to get into. I.e. having to have a pharmacy licence to own a pharmacy - franchisee model.
Beauty and healthcare is lucrative and competitive -"$40 billion-plus pharmacy distribution and retail market, and the broader health, beauty and wellbeing sector.". ABY currently has a MC of 442mil. API has an MC of 631mil. As there has been signs that Amazon has struggled with the idea of online prescriptions in Australia, it is a sector in which case WES can dominate.
The downside is WES doesn't make a second bid. Which will be detrimental in the short term. However as the SP drops, the risk reward of this investment is turning more favourably for me to dip in. Also the SP was around this range in April prior to the bid. Timing of bid from WES was impeccable.
Looking at the long-term, WES, WOW, COL or SIG are all capable of extracting more value from API if they take it over. This will make the growth story of all companies more compelling. If nothing happens, it will be interesting when or if the Chemist Warehouse IPO occurs.
API Price at posting:
$1.30 Sentiment: Hold Disclosure: Held
