Priceline Pharmacy Rescue Deal Falls Through as Wesfarmers Backs Out

Wesfarmers, conglomerate known as the owner of Bunnings and Kmart, has walked away from a rescue deal the largest franchisee of Priceline Pharmacy.

54 stores belonging to Infinity Pharmacy Group, Priceline's largest franchisee, were put into receivership in December.

The collapse of the deal leaves behind creditors who are owed more than $400 million.

Wesfarmers Walks Away from Rescue Deal

According to news.com.au, Wesfarmers acquired Priceline operator Australian Pharmaceutical Industries (API) in 2022. The conglomerate does not directly own Infinity Pharmacy Group.

Wesfarmers was supposed to inject equity to Infinity Pharmacy but ended up pulling the plug just before Christmas, as noted by the Daily Mail.

Receivership firm KPMG and voluntary administrators Teneo have now taken over the operations of the pharmacy and will likewise facilitate the sale process.

The good news is that the employees of Priceline Pharmacy will be retained and paid through the process, according to reports.

Wesfarmers Exec Explains Pulling Out of Rescue Deal

Wesfarmers Health Chief Customer Officer Richard Pearson has described the move as "unavoidable" at that time.

"Community pharmacies hold a trusted position in Australia, which the over-leveraged approach to network growth pursued by Infinity's management risked undermining," Pearson said in a note to franchisees and staff this week. Per the Daily Mail, the note was sent this week.

He added, "Therefore, after extensive engagement with Infinity management and creditors and detailed financial due diligence, we had no option but to draw a line in the sand."

It was likewise noted that there was a "breakdown of trust across all parts of the relationship."