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Is Reckitt trumping Bayer for Schiff?

Last updated on 22-Nov-2012 at 09:21 GMT2012-11-22T09:21:21Z

Is Reckitt trumping Bayer for Schiff?

A $1.4 billion counterbid by Reckitt Benckiser Group Plc may be winning the race for Schiff Nutrition International Inc., with reports indicating that German pharmaceutical giant Bayer will not raise its offer and is walking away from the deal.

Bayer announced a $1.2 billion (€920m) acquisition of Salt Lake City-based Schiff on Oct 30.  It was by far the biggest deal of 2012 in the dietary supplements space, and the biggest deal since DSM acquired Martek Biosciences for $1.1 billion in a deal that was completed in early 2011.  The Carlyle Group’s $3.8 billion acquisition of NBTY in 2010 tops that list.

According to Bloomberg, an unsolicited tender offer for Schiff was made by Reckitt on November 16.

Utah-based Schiff does 90% of its business in the US and has brands like the krill omega-3 offering, MegaRed; the glucosamine joint health product Move Free; and immunity supplement, Airborne, which it acquired in March this year.

75-year-old Schiff registered sales of $259m (€200m) for its fiscal year ended May 31, 2012 and forecast 43-46% growth for the 2013 fiscal period.

According to Reckitt, its offer is for $42.00 per share in cash, or approximately $1.4 billion.

"Reckitt Benckiser’s offer will be subject to Schiff and its controlling stockholders terminating their merger and related agreements with Bayer HealthCare LLC, and entering into definitive agreements with Reckitt Benckiser, and to other customary conditions, including the tender of a majority in voting power of Schiff shares of common stock, all of which will be set forth in the offering documents to be filed," said Reckitt.

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