Reckitt Benckiser, the consumer goods giant, has made a rival bid offer of $42 (£26.3) a share in cash for Schiff Nutrition, which is a 23.5% premium over a deal for $34 (£21) a share, or $1.2bn (£750mn), putting a spoke in the deal between Schiff Nutrition and the German pharmaceutical giant Bayer that was announced on October 30.
Reckit Benckiser’s new offer to Schiff Nutrition stands at $1.4bn (£870mn) now, paving the way for it to enter the $30bn (£18.8bn) vitamin and nutritional supplement global market. As Reckitt Benckiser has already made its mark in health, hygiene and home sectors, it’s long-cherished dream was to enter the fast-growing vitamin field.
Reckitt Benckiser said that it would be prepared to sign a merger agreement “substantially similar to the one Schiff currently has with Bayer.” Reckitt Benckiser which produces Lysol, Clearasil and Calgon, said it looked forward to engaging with Schiff’s board.
Rakesh Kapoor, chief executive of Reckitt Benckiser, said, “When the Bayer deal was announced without Schiff having run a public auction process, Reckitt Benckiser began working on what he described as a superior offer that included more money and more certainty of closing.” He also added that Reckitt Benckiser had significant deal experience and extensive sales channels that could help propel Schiff’s sales.
If successful, this would be Reckitt Benckiser’s biggest takeover since July 2010, when it announced a $3.9bn (£2.4bn) deal for SSL International, maker of Durex condoms and Dr. Scholl foot products.
It is believed at large that investors are putting their money on Bayer to match or exceed the $1.4bn (£0.87bn) bid and force Reckitt Benckiser to pay up for a bigger foothold in the $30bn (£18.8bn) market for vitamins and supplements. Shares of Schiff Nutrition rose 0.39% to 44.15 and with this move Reckitt Benckiser shot up 12p to 3789.00p.