This is from Motley Fool - appeared on my web home page this...

This is from Motley Fool - appeared on my web home page this morning.

Wesfarmers (ASX:WES) share price struggles amid latest API speculations

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The Wesfarmers Ltd (ASX: WES) share price struggled today amid the latest news about the ongoing takeover fight for AustralianPharmaceutical Industries Ltd (ASX: API).

What’s going on?

The Wesfarmers share price went down more than 1%today. That’s on the same day that the S&P/ASX 200 Index (ASX: XJO) went down around 0.3%.

Both Wesfarmers and Sigma HealthcareLtd (ASX: SIG) are interested in buying API. Each business has a different offer for the company.

Sigma has previously submitted an offer that wasconditional, non-binding and indicative to merge with API. Sigma thinks thatthe rationale for a combination of API and Sigma is “highly compelling” withsignificant benefits accruing to both sets of shareholders.

Under the proposal, API shareholders would receivea consideration of 2.05 Sigma shares and $0.35 cash for each API share held.This put the total bid at a value of $1.57 per API share, before the expectedsynergies. The API shareholder base would own just under half of the businessif the deal were to go through.

Sigma is bullish on what a combination of the twobusinesses could mean. Management think it would result in the diversificationof revenue streams, product and customer. Another benefit could be significantsynergies and other efficiencies being available for shareholders. It couldcreate a stronger platform to operate in a changing industry landscape. Anenlarged Sigma could also benefit from greater scale and balance sheetcapacity.

According to reporting by The Australian, Sigma and its advisers are thinking about “a raid” on API. The newspaper noted that Sigma could buy a “large” stake in the business by acquiring shares on the market. It also suggested that Sigma is thinking about increasing its takeover offer for API.

Where does this leave Wesfarmers and the share price?

Last week, Wesfarmers acquired 19.3% of APIfrom Washington H. Soul Pattinson and Co. Ltd (ASX: SOL).

As part of the announcement, it noted it’s stillcommitted to buying API, with an offer of $1.55 cash per API share on thetable. It’s currently progressing with its confirmatory due diligence tosupport its proposal.

Wesfarmers said it has the view that its proposalis superior to the Sigma proposal and is in the best interests of APIshareholders. The retail conglomerate does not intend to support or vote its19.3% holding of API in favour of the Sigma proposal.

Rob Scott, the Wesfarmers managing director, saidthe proposal would deliver an attractive premium and certain cash return to APIshareholders:

Wesfarmers continues to see opportunities to investin and strengthen the competitive position of API and its community pharmacypartners. Exercising our option to acquire 19.3% of API reflects the group’scommitment to the transaction and the continued progress of the Wesfarmersproposal.

Wesfarmers thinks that buying API would give it thebasis of a new healthcare division and a platform from which to invest anddevelop capabilities in the growing health, wellbeing and beauty sector.