Reckitt Benckiser launches counter-offer for Schiff
Slough based consumer goods giant Reckitt Benckiser has launched a 1.4bn-dollar (882m-pound) counterbid for US nutrition specialist Schiff Nutrition International, with the tender offer beginning today.
Slough based consumer goods giant Reckitt Benckiser has launched a 1.4bn-dollar (882m-pound) counterbid for US nutrition specialist Schiff Nutrition International, with the tender offer beginning today.
At $44 per share that constitutes 27% more than German conglomerate Bayer's own £693m ($1.1bn) offer announced last month and a 24% premium over the closing price of Schiff's shares last night.
Shares of Schiff finished yesterday's session at $33.92 dollars, but at one point rose as high as $44.19 in after-hours trading, which may indicate that some thought another offer from Bayer was still possible.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
While by some accounts Reckitt Benckiser has a good track-record as regards its acquisitions, yesterday's offer price implied paying what at first glance is a rather lofty 5.41 times 2012 sales and 3.74 times the sales forecast for the year ending in May 2013.
However, although the US outfit's revenues are expected to increase sharply in the year ended in May 2013 (to $374.33m from $251.65m), according to the consensus estimates compiled by FactSet Schiff's sales growth rate is expected to slow down in the year afterwards, with revenues seen rising to $415.97m.
Nevertheless, the company enjoys very respectable gross margins, of approximately 46%, which are far better than the 37% sector average.
In any case, shares of Schiff would now seem to be rather fully valued.
At 08:47 shares of Reckitt are falling by 20p to 3,731p.
--More to follow--
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
-
Higher rates are disappearing – should you fix your savings?
Fixed savings rates have dropped to their lowest levels in over a year. Should you fix your savings now ahead of a potential base rate cut in November?
By Katie Williams Published
-
Nine million people fall victim to financial scams, says Citizens Advice
The charity says that around one in five people across the UK have been caught out by a finance scam in the past year - here is how to protect your money
By Chris Newlands Published