Reckitt Benkiser bids $1.4 bn for Schiff

The bid, which tops Bayer's $1.2 billion price, opens up a potential bidding war for Schiff, whose portfolio of vitamins and nutritional supplements including MegaRed for heart care and Move Free for joints is appealing to companies seeking stable sources of growth.

Reckitt, the British consumer and healthcare company, said late on Thursday it would offer $42 for each Schiff share, a 23.5 percent premium over the $34 per share that Bayer, Germany's biggest drugmaker, agreed to pay on Oct. 30.

Shares of Schiff Nutrition surged nearly 30 percent to $44 in after-hours trading on the New York Stock Exchange, above Reckitt's offer and indicating some investors expect the bidding to go higher still.

Reckitt's offer values Schiff at about 3.6 times its forecast 2013 annual sales, which is around the top end of deal multiples in the non-prescription drugs industry.

But it would get Reckitt into the $30 billion global market for vitamins and supplements for the first time, complementing its existing strength in other areas of consumer health.

When this offer was made by Bayer - which was a bilateral agreement and not a public auction process - we knew that this was an area we would be very interested in, Reckitt's Chief Executive Officer Rakesh Kapoor told Reuters.

That's why we started to work and look at it once

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