Bayer's bid to buy US vitamins firm Schiff Nutrition International could be scuppered after the UK's Reckitt Benckiser came in with a higher offer worth about $1.40 billion.
A fortnight ago, Bayer said it would pay out $1.2 billion, or $34 per share, to get hold of Schiff and its vitamins and nutritional supplements. However, Reckitt has offered $42.00 per share, which represents a premium of 23.5% over the Bayer bid.
Reckitt chief executive Rakesh Kapoor said an acquisition "would provide a powerful entryway into the large and rapidly growing $30 billion global VMS market", which would be "the largest consumer healthcare sector in which we operate". He added that Schiff would be an ideal addition to his firm's "new strategic focus in global health and hygiene, and would give us immediate scale in VMS in the USA".
Mr Kapoor added that "we firmly believe that our entrepreneurial and consumer-focused mindset, our infrastructure, speed and scale, combined with Schiff’s leading brand portfolio, will generate sustained value for our shareholders". Reckitt claimed that "it sees no reason why this tender offer could not close before year end, assuming prompt due diligence, and it will be prepared to sign a merger agreement substantially similar to the one Schiff currently has with Bayer".
Reckitt concluded by saying that it looks forward to engaging with Schiff’s board and "is confident that they will recognise it as a superior proposal". Schiff and Bayer have yet to respond to the new bid for the Salt Lake City-based firm which expects sales of $385 million for the fiscal year ending May 2013.
Schiff's product portfolio includes a number of market-leading brands in the specialist product category in the USA, including MegaRed (number 1 in the healthy heart segment), Move Free (second in joint care) and Airborne (number 2 in immune support).