Share issue gives Life Pharmacy $2.3m for shopping trip

Life Pharmacy has a 49pc stake in 16 stores. Picture / Brett Phibbs

Life Pharmacy is shopping for business since a new share issue bolstered its coffers by $2.3 million.

The company, which owns the Life Pharmacy brand and a 49 per cent stake in 16 Life Pharmacy stores, said yesterday that it had agreed to issue 2.88 million of ordinary shares to a private investor at 79c a share - a total of $2.275 million.

Once completed, the placement will represent about 9.32 per cent of the company's total shares on issue.

The investor is pharmacist Warren Flaunty, who had held 0.2 per cent.

Flaunty was a former shareholder of online cosmetics retailer Beauty Direct, which bought Life Pharmacy for $38.4 million in March last year, making Life New Zealand's first listed pharmacy group through the back-door listing.

At the time, Flaunty was vocal in claiming Beauty Direct had paid too much for Life.

Shares in Life Pharmacy have traded at below $1.50 in the past year, after listing at $2.01 in March last year.

Last night, they closed steady at 71c.

Life Pharmacy chief executive Tim Roper said the money would help the company pursue its aim of being a multi-brand retailer in the health and beauty category.

As well as broadening into other pharmacy formats, the company was interested in owning other types of businesses in the sector.

It might also look to buy one of its suppliers.

Roper hoped a decision would be made within three months.

Flaunty said he saw Life as an aggressive company and wanted to be involved in its repositioning.

The Waitakere City councillor and Waitemata District Health Board member hoped to get an invitation to join the company's board.

The share issue also helped the firm comply with the shareholder-spread requirements of NZX listing rules.

These require that securities are held by at least 500 public shareholders and that they hold at least 25 per cent of total shares.

To qualify as a member of the public, a shareholder can hold no more than 9.9 per cent of shares.

Life Pharmacy has been granted a waiver from those requirements until September.

The latest issue of shares will raise the proportion held by members of the public to 20.21 per cent of the total on issue.