Bayer Withdraws Schiff Bidding Interest
Bayer have declared that they are not going to follow plans to purchase American vitamins company, Schiff Nutrition International, four days after their $1.20 billion offer was beaten by Reckitt Benckiser.
Roughly three weeks ago, Bayer announced a bid of $34 per share to acquire Schiff, but Reckitt since revealed an offer of $42.00 per share, around $1.40 billion, which signifies a premium of 23.5% over the German group’s bid.
Now, in a filing to the US Securities and Exchange Commission, Bayer has noted that their board “has decided not to propose any increase.”
The Leverkusen-based group added that they continue “to believe that the merger transaction would represent a logical and strategic addition for Bayer’s consumer care business.” However, they came to the decision that “entering a competitive bidding process” in reply to Reckitt’s offer “would result in a price outside Bayer’s set financial criteria.”
The organisation confirmed that “having completed a number of successful acquisitions, Bayer plans to continue its strategy to augment organic growth with strategic bolt-on acquisitions.”
Fabian Wenner, an analyst at Kepler Capital Markets in Zurich, commented that the decision “is a very good and very reasonable move,” adding that “the higher price would have eaten a good part of the expected synergies.”
The original arrangement permitted Schiff to accept an unsolicited higher bid within 30 days, providing they paid Bayer a $22 million breakup fee.
Tarang Amin, Schiff Chief Executive Officer, would have received a $5 million bonus if the Bayer agreement was completed by the 31st December.
The playing field now appears to be clear for Reckitt, whose chief executive last week commented that a Schiff acquisition “would provide a powerful entryway into the large and rapidly growing $30 billion global VMS market.”