KEY POINTS:
Listed company Life Pharmacy says it is considering a bid for all the shares in the country's largest pharmacy group, Pharmacy Brands.
Life has a 49 per cent shareholding in 17 pharmacy companies, representing 16 of the 21 Life Pharmacy stores in this country.
Unlisted public company Pharmacy Brands , formed in 2003 from the merger of Amcal Chemists, Unichem and Dispensary First, has more than 210 stores across the country.
Life said today it had asked advisers and management to prepare an offer under the Takeovers Code for 100 per cent of the issued shares of Pharmacy Brands.
Pricing had not been finally determined, but the intention was that any offer would be at a substantial premium to the last issue price of Pharmacy Brands shares which was $5.50, Life said.
Further details of the offer and formal documentation, if confirmed, would be announced shortly.
A placement of additional equity for Life would be needed for any offer for Pharmacy Brands, and Life said it was working to secure equity commitments for a private placement to a small number of habitual investors.
Any such placement would need approval of Life shareholders, at a shareholder meeting held for that purpose.
Life chairwoman Liz Coutts said the proposed takeover would allow considerable rationalisation benefits.
It was apparent the two groups had several operational synergies and strategic objectives that made a combination of the businesses a desirable outcome, she said.
Life Pharmacy shares were up 10c to 85c around lunchtime today, having ranged between 50c and 98c in the past year. The company's market capitalisation is $25.6 million.
- NZPA
