SA firm share price skyrockets following buyout bid
South Australian company SILK Laser Clinics has seen its share price increase more than 60 per cent on the back of a buyout bid from Wesfarmers.
SILK Laser's Marion store. Photo: Brad Griffin.
SILK Laser Clinics (SLA) shares shot up to $3.02 after Australian Pharmaceutical Industries Pty Ltd (API), a subsidiary of national retail conglomerate Wesfarmers, announced a $169 million buyout bid for the beauty and cosmetics brand on Wednesday.
API’s bid would see SILK’s 140 stores become part of the Wesfarmers Health division, which already operates Clear Skincare Clinics.
Alex Beashel, a SILK representative, confirmed the company intends to accept API’s offer.
“Following careful consideration and consultation with its advisers, the SILK Board has determined that it is in the best interests of SILK shareholders to progress the Indicative Proposal and allow API to undertake due diligence, and negotiation of a binding Scheme Implementation Deed (SID), on an exclusive basis over a period of 30 business days,” she said in a statement to InDaily.
“The Board unanimously intends to recommend that SILK shareholders vote in favour of the proposed scheme of arrangement (at the offer price of $3.15 per share) and each director intends to vote any SILK shares they control in favour of the scheme.”
She added that the vote will be subject to a few factors, including any superior proposals being received.
“The vote will be subject to the parties entering into a binding SID on terms no less favourable to SILK’s shareholders than the Indicative Proposal, no superior proposal being received, as well as an independent expert concluding (and continuing to conclude) that the Indicative Proposal is in the best interests of SILK shareholders,” Beashel said.
SILK Lasers had a 38 per cent increase in revenue to $81.3m last year as it continued to meet customer demand for its services, including laser hair removal, cosmetic injectables and skin treatments.
The company, which was co-founded by Managing Director Martin Perelman with a plan to simply open three stores in Adelaide, was ranked 49 on InDaily’s South Australian Business Index of the top 100 South Australian companies in 2022.
If the sale goes ahead, it would be the third large SA company bought in 2023, after the recent sales of OTR and OzMinerals.
