By Stuart Condie

SYDNEY--Woolworths Group Ltd. has joined the tussle for Australian Pharmaceutical Industries Ltd., apparently trumping retail rival Wesfarmers Ltd. with an 872 million Australian dollar (US$619.6 million) proposal.

Woolworths on Thursday said it had made an all-cash proposal worth A$1.75 per share, surpassing the A$1.55 per share offer by Wesfarmers that the API board had previously recommended to shareholders. Woolworths said the API board determined that its proposal is reasonably likely to be superior.

"There is a compelling strategic rationale to support Woolworths Group's acquisition of API. Health and wellness is a large, fast-growing category and API would be a fantastic addition to our food and everyday needs ecosystem," Woolworths Chief Executive Brad Banducci said.

Wesfarmers looked to have won the bidding for API when Sigma Healthcare Ltd. withdrew its proposal in early November. API, a pharmaceutical distributor that also operates pharmacies and skin-care clinics, had initially said a proposal by Sigma Healthcare Ltd. looked more favorable even though it would take longer to implement.

Write to Stuart Condie at stuart.condie@wsj.com

(END) Dow Jones Newswires

12-01-21 1813ET