(Adds details on the bid, offer premium) Sept 16 (Reuters) -...

(Adds details on the bid, offer premium)

Sept 16 (Reuters) - Australian Pharmaceutical Industries (API) (API) said on Thursday it agreed to grant due diligence to Wesfarmers (WES) after the retail conglomerate sweetened its indicative buyout bid to value the pharmacy chain at A$763.6 million ($560.25 million).

As per the new bid, API shareholders would now receive A$1.55 per share, up from the previous offer of A$1.38 apiece that was rejected in July.

API, whose retail-facing business has been hit hard by COVID-19 lockdowns, had rejected the earlier A$680 million offer from the retail conglomerate, saying it undervalued the company and that it was "opportunistic."

The revised bid, a premium of 22% to API's last closing price, also allows for dividend payouts of up to 5 Australian cents per share, including a final dividend for fiscal 2021, the pharmaceutical firm said in a statement.

If successful, the deal would mark Wesfarmers' entry into the healthcare sector, adding to its sprawling businesses that span home improvements to office supplies to clothing as well as lithium.

"API board has determined it is in the interests of shareholders to progress the revised indicative proposal and allow Wesfarmers to undertake confirmatory due diligence," API said, adding that it unanimously intends to recommend the bid.

Wesfarmers has been granted until mid-October to carry out exclusive due diligence and make a binding offer for the pharmaceutical firm, API added. ($1 = 1.3630 Australian dollars)