Reckitt Benkiser bids $1.4 bn for Schiff

Analyst Andrew Wood at brokerage Bernstein said the deal made good strategic sense for Reckitt.

This is particularly true given (Reckitt's) ... excellent M&A track record and its ability to quickly extract big synergies from acquired companies, he said.

BIDDING WAR

Reckitt said it expected the deal to boost earnings immediately on an adjusted basis and Bernstein's Wood predicted an uplift of about 1 to 2 percent in 2013 earnings per share.

A Bayer spokesman declined to comment and representatives for Schiff could not be immediately reached for comment.

While Bayer may bide its time before reacting to Reckitt's move, its management will be under pressure to salvage a deal that was well received by investors.

A bidding war cannot be ruled out. Bayer probably has to match the Reckitt offer. This would result in an acquisition price which might get unattractive for Bayer, DZ Bank analyst Peter Spengler said in a research note.

Bayer shares were 0.3 percent higher by 0815 GMT, while Reckitt dipped 0.7 percent.

Under the terms of its deal with Bayer, Schiff is allowed to entertain superior offers made in writing before Nov. 28. If it decides to go with another offer, it would have to pay a relatively modest $22 million breakup fee to Bayer.

With Schiff now in play, analysts said the situation

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