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Monday 3rd August 2009 |
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Life Pharmacy, the chain of chemists that trades on the NZX, offered to acquire rival Pharmacybrands Ltd. in an all-share proposal that values the target at about $20 million.
The board of Pharmacybrands, New Zealand’s largest retail pharmacy group with the Amcal and Unichem brands, has recommended the offer to shareholders, who will receive 39.783 LPL shares for every one of their own held. The proposal values LPL at about $36.2 million, almost three times its current market value.
Shares of LPL jumped 17% to 42 cents after the announcement. The issue price will be 49.1 cents a share.
The merger “represents a real opportunity to establish an organisation of sufficient scale, strength and capability to play a major role in reshaping the pharmacy sector in New Zealand,” LPL said in its statement.
Shareholders with 68.9%, including of Cape Healthcare with 66%, have signed pre-bid agreements stating they will accept the offer, LPL said.
Prior to the share swap, LPL will buy back $4.2 million of its partly paid shares and make a 1:100 taxable bonus issue to use up imputation credits, it said.After the transaction, shareholders of the merged company will be LPL Trustees, representing interests of Andrew Bagnall, and Cape Healthcare, representing interests of Peter Merton and the Zuellig family, it said.
Both companies will appoint independent advisers for the transaction.The merged company will have about 30 partly owned pharmacies, 220 franchised pharmacies and a presence in most towns and cities, it said.
LPL’s brands are Life Pharmacy, Life Metro, Life Outlet and Care Chemist.
Businesswire.co.nz
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