By ELLEN READ
Life Pharmacy is set to become the country's first chemist shop chain listed on the stock exchange.
NZSX-listed Beauty products internet retailer Beauty Direct has told the stock exchange it is negotiating to buy a "number of related businesses operating under the one brand" for a backdoor listing of
those businesses.
A source told the Business Herald that Life Pharmacy "is the target".
Neither Life Pharmacy nor Beauty Direct would comment on the speculation.
Beauty Direct's online operations are run by 26 per cent shareholder and Beauty Direct director Gordon Ritson, who owns a Life Pharmacy franchise in Lower Hutt.
"It would be a positive addition to the sharemarket as pharmacies have been one sector of retail that have shown good overall growth over the past 10 years," one broker said.
There are 21 Life Pharmacy stores around the country - the franchise is owned by a group of pharmacists - but it is not known how many would be involved in a Beauty Direct buyout.
The proposed deal is rumoured to involve a $100 million to $150 million annual turnover.
Beauty Direct's stock exchange notice said the purchase would be paid for by the issue of new shares at 6.5c each - which would result in a significant dilution of existing shareholdings.
The planned transaction is subject to due diligence and shareholder approval. It is expected to be finalised by October.
New regulations allow non-pharmacists to own up to 49 per cent of several pharmacies, compared with the previous limit of 25 per cent in just one pharmacy.
They would also let pharmacists own more than one pharmacy, with holdings as low as 51 per cent compared with the limit now - one pharmacy and a minimum stake of 75 per cent. Beauty Direct shares were last traded at 8.5c.
