Bayer has decided not to pursue plans to buy US vitamins company Schiff Nutrition International, four days after its $1.20 billion bid was topped by the UK's Reckitt Benckiser.

Some three weeks ago, Bayer announced it would pay $34 per share to get hold of Schiff but Reckitt has offered $42.00 per share, around $1.40 billion, which represents a premium of 23.5% over the German group's bid. Now, in a filing to the US Securities and Exchange Commission, Bayer says its board "has decided not to propose any increase".

The Leverkusen-based group added that it "continues to believe that the merger transaction would represent a logical and strategic addition for Bayer’s consumer care business". However, it came to the conclusion that "entering a competitive bidding process" in response to Reckitt's proposal "would result in a price outside Bayer’s set financial criteria".

The company concluded by saying that "having completed a number of successful acquisitions, Bayer plans to continue its strategy to augment organic growth with strategic bolt-on acquisitions". The original agreement allowed Schiff to accept an unsolicited higher offer within 30 days, provided it pays Bayer a $22 million breakup fee.

The field would now appear to be clear for Reckitt, whose chief executive Rakesh Kapoor said last week that a Schiff acquisition "would provide a powerful entryway into the large and rapidly growing $30 billion global VMS market".