Stevens concedes defeat on PWL

Press, 30 August 1989, Page 38

Stevens concedes defeat on PWL

The competition for Pharmacy Wholesalers (5.1.), Ltd, between the listed Stevens KMS Corporation and Community Pharmacy, Ltd, of Hamilton, has been settled. Members of Pharmacy Wholesalers at a meeting in Christchurch have voted in favour of accepting the Community Pharmacy offer, and Stevens KMS has subsequently withdrawn its offer.

Pharmacy Wholesalers is a Co-operative, acting as a wholesaler to South Island pharmacies. In June, Stevens KMS obtained an interim injunction delaying acceptance of the offer by Community Pharmacy. In July, Pharmacy Wholesalers asked both bidders to submit higher bids.

At the meeting in Christchurch on Monday evening, shareholders in Pharmacy Wholesalers were polled on the two offers. Voting was on the basis of the number of shares held in Pharmacy Wholesalers.

Seventy-five per cent of

the votes were for the Community Pharmacy bid, and 25% for the Stevens offer. Pharmacists came from as far as Nelson to vote.

After the meeting of members, the board of Pharmacy Wholesalers met and formally decided to invite Community Pharmacy to subscribe for a million shares at $1 (par) each, which would give the Hamilton firm 78% the equity in Pharmacy Wholesalers. Acceptance by Community Pharmacy is expected to be a formality. Mr Bryan Preston, the general manager of Pharmacy Wholesalers, said the firm’s warehouse in Christchurch would be merged with the Christchurch warehouse of Community Pharmacy. Staff of Pharmacy Wholesalers had already been reduced by a sinking-lid policy and redundancies seemed unlikely. Meanwhile, in a statement to the Stock Exchange yesterday, Mr E. B. Allison, chairman of Stevens KMS, said Stevens would not persevere with

its proposal to take an interest in Pharmacy Wholesalers. “Stevens will continue its independent pharmaceutical wholesaling operations in the South Island, where it receives strong support. We shall continue to strengthen our wholly owned operations in Christchurch and Dunedin and through Stevens (Southland), which is jointly owned with Southland pharmacists,” Mr Allison said.

He suggested that pharmacists who remained part of the co-operative movement would face increasing difficulties in funding both their own retail operations as well as the needs of a wholesaler.

“These difficulties can only increase as the pharmaceutical industry undergoes fundamental change. In all probability, an increasing number of pharmacists will turn to independently funded wholesaling services in order to minimise their cost structure and their total capital commitments,” Mr Allison said.