Up to $6 billion CWH float rumoured

The latest speculation about a possible Chemist Warehouse float has the discount giant asking investment banks to pitch for a float – in the first quarter of 2021

For some time finance pundits have been suggesting that Chemist Warehouse could be gearing up for an initial public offer – one which was, according to The Australian Business Review Dataroom editor Bridget Carter, possibly pushed back to early 2021 by the COVID-19 pandemic.

In July 2020, Ms Carter suggested that another entity – she identified Wesfarmers – could be interested in acquiring the Chemist Warehouse business.

In August, she said it was likely the owners of the group – the value of which she puts at $5 billion – would want to retain an interest in it.

Now, she notes that the pharmacy ownership rules preclude an outright acquisition by a suitor such as Wesfarmers… and says that the discounter “is understood to be asking investment banks to pitch in the first quarter of next year for a role floating Australia’s largest pharmacy chain”.

She says her sources indicate proposals could be finalised by March for either a sale, or a float of the group.

Such a float could be worth up to $6 billion, she says.

“Already, advisory firm Rothschild has been working with the business, preparing the company structure to be ready for a company listing,” writes Ms Carter.

She again raises the issue of Wesfarmers, saying the organisation could purchase a minority stake.

“Chemist Warehouse has undergone a restructure in preparation to be a listed company, but to prevent a major capital gains tax payment, it had to hold the business for more than 12 months,” she concludes.

“A bid to avoid capital gains tax was said to be behind Chemist Warehouse’s move to wait until at least the fourth quarter of the year to embark on its IPO.”

Meanwhile, Jack Gance, Chairman and co-founder of Chemist Warehouse Group, has been in the news commenting on the National Australia Bank’s new Slyp Smart Receipts initiative.

This means that NAB customers will automatically receive itemised smart receipts from participating retailers delivered into the NAB app when they make a purchase, reducing the need for paper receipts.

“We are excited about the opportunity to participate in the innovative digital receipt program NAB and Slyp have brought to market,” Mr Gance said, commenting on the launch, which as well as Chemist Warehouse includes national retailers such as CUE, Barbeques Galore, and Harris Farm.

“We are sure that Slyp will add value and enhance the unique Chemist Warehouse experience.”

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