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Reckitt Benckiser Group, the British consumer goods company, has signed a three-year collaboration agreement with Bristol-Myers Squibb (BMS), under which Reckitt will license a number of Latin American consumer health care brands from BMS. Under the terms of the agreement RB will initially pay BMS $482m to enter into the arrangement which also includes personnel, supply contracts and an option to acquire legal title to the related intellectual property at the end of the collaboration period, based on business performance. The company will have the option to purchase at the end of the three year period. Rakesh Kapoor, Reckitt Benckiser's Chief Executive Officer, said: "This transaction creates a material consumer health care platform, infrastructure and distribution network for RB in both Brazil and Mexico. As such it is an important step in building our consumer health care presence in Latin American emerging markets.
Wednesday's spotlight will also be on British consumer goods company, Reckitt Benckiser Group, which unveils its fourth quarter results. The group announced it signed a three-year collaboration agreement with Bristol-Myers Squibb (BMS), under which Reckitt will license a number of Latin American consumer health care brands from BMS. Investec said it holds a "low-end view" on the fourth quarter on the key like-for-like metric and retained its 'hold' rating at an increased target price of 4,260p. "This reflects the tougher prior comp and the impact of non-core brands on the [third quarter]," it stated.
Reckitt Benckiser: Deutsche Bank revises target price from 4100p to 4600p, while its buy recommendation remains unchanged.
Reckitt Benckiser: Investec increases target price from 3600p to 4260p and leaves its hold recommendation unchanged. Panmure Gordon moves target price from 3975p to 4130p maintaining a hold rating.
Reckitt Benckiser Group: JP Morgan moves target price from 3500p to 4300p and maintains a neutral rating.
Reckitt Benckiser Group: HSBC ups target price from 3800p to 4400p retaining a hold recommendation.
13 Feb FY 22 Apr IMS 2 May AGM 29 July 1/2 yr 22 Oct IMS
2012." Shiff last announced that it has indicated projected net sales of around $385m and forecast proforma EBITDA (earnings before interest, tax, depreciation and amortisation) of approximately $84.6m for the fiscal year ending May 31st 2013. Schiff's vitamin, minerals and supplements product portfolio includes a number of market leading brands in the specialist product category in the US, including its MegaRed prouct, which is ranked number 1 in the healthy heart segment.
Consumer goods giant Reckitt Benckiser Group has signed a definitive merger agreement with healthy snack maker Schiff Nutrition International. If Schiff's shareholders agree to the deal, they will tender their shares to Reckitt's previously announced cash offer of $42.00 per share, valuing Schiff at $1.4bn. The offer expires on December 14th. Reckitt plans to pay the consideration with cash and existing credit facilities and said the transaction is expected to be immediately accretive to earnings on an adjusted basis. Rakesh Kapoor, Reckitt Benckiser Chief Executive Officer, said: "We are very pleased to have reached a mutually beneficial agreement with Schiff and are excited to enter the $30bn global vitamins, minerals and supplements market with such a strong portfolio of high quality branded business in the USA. Schiff's portfolio is an excellent fit with our strategic focus on health and hygiene." "The sub-categories within which Schiff operates have strong growth momentum and to this we expect to combine Reckitt Benckiser's strong go to market capabilities as well as proven skills in branding, innovation and consumer communication andeducation." "The integration process will be undertaken promptly following completion of the transaction, so that the business can continue its growth trajectory with minimum disruption and realize synergies as soon as possible. Reckitt Benckiser expects the tender offer to close before the end of calendar year
Rakesh Kapoor, Reckitt Benckiser Chief Executive Officer, said, "We are very pleased to have reached a mutually beneficial agreement with Schiff and are excited to enter the $30 billion global vitamins, minerals and supplements market with such a strong portfolio of high quality branded business in the USA. Schiff's portfolio is an excellent fit with our strategic focus on health and hygiene, where in health care in the USA we already have Mucinex, Delsym, Cepacol and Durex as major brands." "The sub-categories within which Schiff operates have strong growth momentum and to this we expect to combine Reckitt Benckiser's strong go to market capabilities as well as proven skills in branding, innovation and consumer communication andeducation." "The integration process will be undertaken promptly following completion of the transaction, so that the business can continue its growth trajectory with minimum disruption and realize synergies as soon as possible. Reckitt Benckiser expects the tender offer to close before the end of calendar year 2012." Kapoor concluded, "We are confident that our considerable expertise in building great consumer brands will drive sustainable growth and shareholder returns from this transaction."
Reckitt Benckiser Signs Merger Agreement To Acquire Schiff Nutrition Slough, England - November 21, 2012 - Reckitt Benckiser Group PLC ("Reckitt Benckiser") (LSE: RBL) today announces it has signed a definitive merger agreement with Schiff Nutrition International, Inc. ("Schiff") (NYSE:SHF) a leading provider of branded vitamins, nutrition supplements and nutrition bars in the United States and elsewhere. The Board of Directors of Schiff has approved the transaction and will recommend that its stockholders tender their shares into Reckitt Benckiser's previously announced cash tender offer of $42.00 per share, valuing Schiff at $1.4 billion. Reckitt Benckiser's tender offer will expire at 11:59p.m. New York City time, on December 14, 2012, unless extended in accordance with the merger agreement and the applicable rules and regulations of the SEC. Reckitt Benckiser will finance the transaction with cash and existing credit facilities. The transaction is expected to be immediately accretive to earnings on an adjusted basis.
Consumer goods company Reckitt Benckiser (RB.) has signed a merger agreement with Schiff Nutrition in a 877 million pounds deal. This is in an attempt to springboard the company into higher margin health business. Schiff is a major player in the US healthcare market and has Delsym, Cepacol and Durex as its major brands. Both companies are looking to complete the integration process promptly so that business can continue with minimum disruption. The shares rose by 14p to 3,859p.
"The challenge will be to convince that vitamin brands are as strong as OTC brands (some are clearly commodities like vitamin C, others Reckitt believe aren't.)" Reckitt Benckiser expects to close the tender offer before year end, assuming prompt due diligence, with the looming increase in US taxation on capital gains being a factor to watch. Lastly, the company indicates that it is prepared to sign a merger agreement substantially similar to the one Schiff currently has with Bayer. "Reckitt Benckiser looks forward to engaging with Schiff's Board and is confident that they will recognize it as a superior proposal," it concludes.
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. Also worth pointing out, according to Bloomberg deals in this area have averaged 17 times earnings before interest, taxes, depreciation and amortisation (EBITDA) over the last 5 years or 3 times sales. In any case, shares of Schiff would now seem to be rather fully valued. Commenting on all of the above, analysts at Credit Suisse had this to say: "Vitamins represents a new market for Reckitt, and one the previous management was reluctant to explore. The deal (if successful) is not large in size (6 months' free cash flow), but as a statement of intention/direction it is rather more significant. It is consistent with the move to Health/Hygiene as detailed in the February investor presentation.
Slough based consumer goods giant Reckitt Benckiser has launched a 1.4bn-dollar (882m-pound) non-solicited counterbid for US nutrition specialist Schiff Nutrition International, with the tender offer beginning today. At $44 per share that represents 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. Rakesh Kapoor, Reckitt Benckiser Chief Executive Officer, highlighted that this acquisition would provide a powerful entryway into the large and rapidly growing $30bn global vitamins, minerals and supplements (VMS) market. Similarly, the company believes that the purchase would give it immediate scale in VMS in the USA. 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 estimated 2012 sales and 3.74 times analysts' sales forecasts for the year ending in May 2013.
I received, for free, the whole report on this aquisition at 7:30 this am. I think LSE needs to up its game and provide RNS for free.
Gibson said: "The daily chart shows that Reckitt shares have been in a rising trend channel since this time last year, with the floor of the channel currently running through 3,600p. "While there is no end of day close back below the late 2011 uptrend line, we expect 3,900p to be hit at the turn of the year." Shares were trading down 0.67% at 3,725p in morning trade on Monday, though are still up over 1.5% over the last week.
Galvan Research has labelled consumer goods giant Reckitt Benckiser as a 'buy' after the company surpassed expectations in the third quarter. "Time and time again the excitement hungry City has downplayed the fundamentals at Reckitt's, only to be surprised when the group goes on to beat expectations," said Galvan's head of research Andrew Gibson. "On this basis alone, and backed by the reiteration of FY 2012 guidance, Reckitt shares are rated a 'buy' at Galvan Research, a view also supported on a technical level with a charting breakout towards 3,900p." The The Cillit Bang, Vanish and Nurofen manufacturer reported some strong third-quarter results last Wednesday which were "underpinned by an excellent performance in emerged markets and an improved performance in Europe North America." Net revenue in the three-month period was down 1% at £2,422m, but up 4% at constant exchange rates. For the full-year, the company said it still expects like-for-like net revenue growth of 200 basis points above the market growth rate. "We now expect market growth to be at the top end of the 1-2% range," said Chief Executive Rakesh Kapoor.
Panmure Gordon has raised its target price for consumer products group Reckitt Benckiser after strong growth in Europe and North America (ENA) helped like-for-like (LFL) sales beat forecasts in the third quarter. Total reported sales, down 1% at £2,422m, were pretty much in line with consensus, however LFL growth of 5% came in above the 4% estimate. A robust result from ENA - the region delivered its first growth since the fourth quarter of the year before - returned to growth, though the group still experienced a modest slowdown in Russia, Middle East and Africa (RUMEA) and Food experienced an "evaporation of growth", Panmure said. The broker said: "The ENA performance is encouraging, but we would caution against getting too carried away by one quarter of 2% growth, particularly as it was helped by a significant increase in brand investment and a good start to the cold/flu season. Our 2012E earnings per share forecast of 248.7p remains unchanged, and only represents 0.6% growth on 2011A. "Reckitt only reiterated its full-year outlook, and as such we believe the initial 6% jump in the share price was a slight over-reaction. Nevertheless, we nudge our price target up by 3% from 3540p to 3650p and reiterate our 'hold' recommendation." Shares were down 0.66% at 3,743p in mid-morning trade on Thursday, pulling back of the decent bounce the day before.
Reckitt Benckiser: Nomura raises target from 4,100p to 4,200p, buy rating kept; Credit Suisse lifts target from 3,500p to 3,700p, neutral rating kept.
http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=20452352
Tempus in The Times says the trading update from Reckitt Benckiser, which has been at the heart of the discounting wars, suggests that in Europe and North America the picture may be improving. Like-for-like growth here in the third quarter was two per cent. This might not seem like much, but it compares with a one per cent fall in each of the previous two quarters. It is also rather better than seen or expected from its peers. Like-for-like growth in the first three quarters from household products was up 4 per cent, rather better than had been expected and prompting yesterday’s 3.7 per cent rise in the shares to £37.68. The shares are on an expensive 15 times’ earnings, which suggests immediate progress may be limited, but they are a strong 'hold' long-term.
Broker comment Deutsche Bank, the house broker, issued a bullish note on the back of the news. Analyst Harold Thompson reiterated his 'Buy' recommendation with a price target of 4100p. Thompson wrote: "As we outlined at the start of this year in a major report we very much see RB as one of the interesting recovery stories across European staples. We concluded that the slowdown in home care was transitory and not structural, whilst the move into health and hygiene would transform RB's growth and margin profile long term. Finally RBP would end up creating more value to its shareholders than most would have expected. Thus, with the shares at the low end of the European staple valuation spectrum, we reiterate our high conviction BUY case."
Russia, the Middle East and Africa In Russia, the Middle East and Africa, which delivered 17% of core net revenue, total net revenues YTD increased 8% at constant exchange rates to £1,077m with like-for-like growth of 8%. On a category basis Health growth was driven by Durex, Gaviscon and Strepsils. Hygiene performed particularly well behind Dettol, Finish, Harpic and Veet driven by initiatives such as Dettol Daily Care and Re-energize. Air Wick performed well in the Home category.