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Rumour mill working overtime on Wesfarmers’ next big acquisition

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    Interesting news for HSO. I wonder what the price would have to be for a takeover.


    • The Australian
    • 12:00AM June 29, 2017
    It may not be the first time Wesfarmers has been on the hunt for acquisitions but the rumour mill is once again alive and well about what the Perth-based conglomerate may be buying.
    This time the thinking is that Wesfarmers could be considering an acquisition in the industrials space, although exactly what is on its radar is not entirely clear.
    The logical target would be the Australian listed chemicals and fertiliser maker Incitec Pivot, which is currently worth $5.7 billion. Another company on its radar could be Orica, a business that Wesfarmers was keen to buy before, even thought it would cost a massive $7.7bn at least to take over.
    It comes with speculation that a major takeover in the industrial space is brewing, potentially involving investment banks JPMorgan and UBS, and others say Wesfarmers could be involved.
    Inbound chief executive Rob Scott has signalled that an acquisition in the industrial space could be on the agenda, although Wesfarmers has scrutinised a wide variety of targets in the past.
    Among them are said to be AMP, Orica and even the private hospital operator Healthscope.
    On the face of it, Healthscope may look like an odd choice for Wesfarmers to consider buying, but one logical reason it could have previously been in its sights is that it could offer the conglomerate more access to consumer data, which it already can gather in a major way through its retailers, including supermarket Coles and department stores Target and Kmart.
    Currently, Wesfarmers’ industrial assets are in the chemicals, energy and fertilisers division.
    Its companies in the chemicals space include CSBP Ammonia, Ammonium Nitrate and Industrial Chemicals along with Queensland Nitrates.
    Some market analysts have played down the suggestion that a takeover by Wesfarmers could be afoot given that the company is in the middle of changing chief executives, with Mr Scott taking over from Richard Goyder.
    The market reacted badly in the mid-1990s when Boral embarked on a major acquisition just before Tony Berg began.
    And it’s worth remembering that Wesfarmers is known to look at everything.
 
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