Bayer says trumping Reckitt's $1.4B Schiff bid is too rich

If you were looking for a bidding war over Schiff Nutrition to give your Thanksgiving feast an ironic twist, you're going to be disappointed. Bayer says it's patently not interested in trumping Reckitt Benckiser's $1.4 billion offer.

You'll recall that Bayer agreed to buy U.S.-based Schiff for about $1.2 billion, or $34 per share, aiming to augment slower-growing prescription drug sales with a consumer healthcare play. Schiff makes joint-care and Omega-3 supplements, Tiger's Milk nutrition bars and the Airborne cold-prevention product.

But Reckitt stepped in with a $1.4 billion offer. Its $42-per-share bid came within the 30-day period allowed by Bayer's deal with Schiff, provided the company pays Bayer a $22 million breakup fee, Bloomberg notes.

Raise the stakes, as Schiff investors apparently expected, considering the stock run-up? No go, Bayer says. "Entering a competitive bidding process in response to the [Reckitt's bid] would result in a price outside Bayer's set financial criteria," the German company said in a securities filing.

"This is a very good and very reasonable move," Kepler Capital Markets analyst Fabian Wenner told Bloomberg. "The higher price would have eaten a good part of the expected synergies."

That doesn't mean Bayer is backing off of deals. It's still shopping for "strategic" bolt-on acquisitions, the filing states. Obviously, overpaying isn't something that Bayer considers strategic.

Reckitt, however, feels that it got the long end of the stick. A company spokesperson told Reuters that its offer stands--"and we look forward to reaching an agreement."

- get Bayer's SEC filing
- see the Bloomberg story
- read the Reuters news
- get more from Reuters

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