September 28, 2006 12:00am Article from: Font size: + - Send this article: Print Email AUSTRALIAN Pharmaceutical Industries confirmed the market's worst kept secret yesterday when the troubled drug wholesaler announced it had been approached by potential buyers.
In a short statement to the Australian Stock Exchange, API said it had received approaches from "a number of parties" but the contact had been of "an informal nature". Rivals Symbion Health and Sigma confirmed their interest yesterday, but said it would have to be the right price and could only come after API fixed its continuing IT problems.
Other potential buyers included Hong Kong-based drug distributor Zuellig, retailer Metcash as well as rampant private equity groups. However Woolworths yesterday denied it had approached API.
Embattled API, which also operates Priceline and Price Attack stores, issued another profit warning late yesterday and denied reports it had established a data room to allow buyers to examine the business.
"In line with its fiduciary duties the board will consider any bona fide proposals which might be put to it by those parties," API said in a statement.
API shares had soared in recent days after rumours it was in takeover talks after a disastrous stretch which culminated in the group losing $17 million due to still unresolved computer problems. API chief executive Jeff Sher quit and shares were suspended for six weeks while the company tried to find the money.
API shares jumped 43, or 19 per cent, yesterday to close at $2.66 on top of an 8 per cent gain on Tuesday.
Symbion chief executive Robert Cooke said it had held talks with API about industry consolidation and it remained interested, although no formal offer had been made.
Mr Cooke has made no secret of the fact he is looking for growth after the company demerged from Mayne Group last year.
Rumours were strengthened when Symbion hired long-time Sigma chief financial officer Mark Hooper.
"It would have to be at the right price and after we have more clarity on the extent of their technical problems," he said.
Sigma chief executive Elmo de Alwis echoed Mr Cooke's statements and said industry consolidation was necessary but any deal would require regulatory approval.
"The issue with their accounts needs to be settled first, otherwise it is impossible to value the business," he said.
Its is believed Sigma has been capturing market share from API as it has been distracted with its technical issues.
API, Symbion and Sigma dominate the drug distribution business and virtually split the market between them.
API is due to face angry investors today at its annual meeting in Sydney. document.write('%3Cobject%20classid=%22clsid:D27CDB6E-AE6D-11cf-96B8-444553540000%22%20');document.write('codebase=%22http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=3,0,0,0%22%20');document.writeln('id=%22obj6420%22%20width=%22300%22%20height=%22250%22%3E');document.write('%3Cparam%20name=%22movie%22%20value=%22http://saturn.tiser.com.au/images/NEWS_ent_Paris_300x250.swf?clickTAG=http://mercury.tiser.com.au/accipiter/adclick/CID=00001914aafdfeb000000000/acc_random=30624649/SITE=HWT/AREA=NEWS.FINANCE/AAMSZ=300X250/pageid=66112108%22%3E%20%3Cparam%20name=%22quality%22%20value=%22autohigh%22%3E%20%3Cparam%20name=%22wmode%22%20value=%22transparent%22%3E%20');document.write('%3Cembed%20src=%22http://saturn.tiser.com.au/images/NEWS_ent_Paris_300x250.swf?clickTAG=http://mercury.tiser.com.au/accipiter/adclick/CID=00001914aafdfeb000000000/acc_random=30624649/SITE=HWT/AREA=NEWS.FINANCE/AAMSZ=300X250/pageid=66112108%22%20quality=%22autohigh%22%20wmode=%22transparent%22');document.write('swLiveConnect=%22false%22%20width=%22300%22%20height=%22250%22%20');document.writeln('type=%22application/x-shockwave-flash%22%20pluginspace=%22http://www.macromedia.com/shockwave/download/index.cgi?P1_Prod_Version=ShockwaveFlash%22%3E');document.writeln('%3C/embed%3E');document.writeln('%3C/object%3E'); Also in BusinessStocks strong on US lead MySpace tipped to top $20bn Salary row: Trujillo worth it, says chairman Big spenders deliver: DJs hits record numbers Battle: Vision bids intensify Speculation: Amcor boom a mixed bag Sentenced: Enron CFO jailed in tears Docklands: ANZ joins bank enclave Approaches: API suitors confirmed Keep it simple: Call to cut waffle in reports Retail: Country Road back with DJs Dow desperate to break record Booming: Ethics growing Markets: Indices surge with US gains Shares surge: US sets market alight
