The Wesfarmers Ltd (ASX: WES) share price is slightly (0.2%) higher after being given the go-ahead to acquire the Silk Laser Australia Ltd (ASX: SLA) business.
Wesfarmers is the parent business behind Australian Pharmaceutical Industries (API), which operates Priceline and Clear Skincare Clinics.
Silk Laser Australia describes itself as one of Australia’s largest specialist clinic networks, offering “a range of non-surgical aesthetic products and services” – it offers laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products.
ACCC green-lights the deal
Wesfarmers is looking to buy Silk Laser Australia for $3.35 cash per share. Silk Laser Australia is allowed to pay a fully franked dividend of 10 cents per share, with the cash offer to be reduced by the cash component of any permitted dividends.
API told Silk Laser that it has received written confirmation from the Australian Competition and Consumer Commission (ACCC) that it does not intend to conduct a public review of the proposed acquisition.
The ACCC condition that was part of the takeover offer from API has therefore been satisfied.
It has also been confirmed to API by the New Zealand Commerce Commission (NZCC) that having reviewed and considered the submission, the NZCC won’t consider the acquisition further.
Is that the final step?
Owners of Wesfarmers shares can’t get too excited yet because the takeover is still subject to some conditions, such as Silk Laser shareholders approving the deal, the independent expert’s report concluding that the takeover is in the best interests of Silk Laser shareholders, and a few other “customary conditions.”
Why does this deal make sense?
For Silk Laser shareholders, the takeover offer is a 38.4% premium to the share price of $2.42, which was just before the API offer.
The Silk Laser Chair Boris Bosnich said:
Wesfarmers Health represents a logical, long-term owner for the SILK business, with the expertise and capacity to support continued growth for SILK and its franchise partners.
The API offer provides certainty for shareholders, and we have been pleased with the alignment between the businesses seen through due diligence.
For Wesfarmers Health, the company believes it will complement the division’s existing presence in the sector through its ownership and operation of Clear Skincare Clinics. Wesfarmers sees a good long-term future in the healthcare space, with attractive tailwinds such as Australia’s ageing population.
Wesfarmers share price snapshot
Since the start of 2023, Wesfarmers shares have risen by around 10%, as we can see on the chart below.
