Reckitt Benckiser’s (LON:RB) chief executive has signalled the group has no regrets about its $17-billion acquisition of Mead Johnson last year, Reuters has reported. The comments come despite concerns that the FTSE 100 group may now be too stretched to buy Pfizer’s consumer health business.
Reckitt Benckiser’s share price rose on Friday, adding 1.01 percent to close at 5,810.00p. The stock outperformed the broader UK market, with the benchmark FTSE 100 index climbing 21.27 points to end the previous session 0.30 percent higher at 7,224.51.
No regrets about Mead Johnson
Reuters quoted Reckitt Benckiser’s chief executive Rakesh Kapoor as commenting over the weekend that the Mead Johnson acquisition had already benefited the group, although it had only just reversed several quarters of decline in that business.
“I can easily say that if I knew then what I know now, I would still have gone for Mead Johnson,” he pointed out. The comments come with some analysts questioning whether the group has the managerial and financial strength to pull off a deal for Pfizer’s consumer business which comprises a string of over-the-counter treatments, including painkiller Advil.
Kapoor, however, declined to say whether Reckitt was bidding for the unit, or another smaller vitamin business being sold by Merck.
Analysts on Reckitt Benckiser
JPMorgan Chase & Co reiterated its ‘overweight’ stance on the FTSE 100 group last week, without specifying a valuation on the shares. According to MarketBeat, Reckitt Benckiser currently has a consensus ‘hold’ rating and an average price target of 7,198.64p.
Liberum also recently reaffirmed its ‘buy’ rating on the blue-chip group, noting that it believed that Reckitt Benckiser could outbid GlaxoSmithKline (LON:GSK) for Pfizer’s consumer health division and “still deliver meaningful earnings per share accretion”.