Reckitt Benckiser share price rallies as group drops out of race for Pfizer business
Shares in Reckitt Benckiser (LON:RB) have jumped in London this morning, with investors reacting positively to news that the consumer goods giant has dropped out of the race for Pfizer’s consumer health business. The move leaves GlaxoSmithKline (LON:GSK) in pole position to acquire the unit which comprises a string of over-the-counter treatments, including painkiller Advil.
As of 08:37 GMT, Reckitt Benckiser’s share price had added 4.57 percent to 5,883.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.12 percent lower at 7,030.38 points. GSK’s share price meanwhile has given up 1.22 percent to 1,280.40p so far in today’s trading.
RB drops out of race
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Reckitt Benckiser announced in a statement yesterday that it had ended its discussions with Pfizer regarding the US group’s Consumer Healthcare business, noting that its proposal had been for part of the unit.
“Our priority remains organic growth, including the completion of the integration of Mead Johnson Nutrition and creating further value from reorganising into two new business units – Health and Hygiene Home,” the FTSE 100 group’s chief executive Rakesh Kapoor commented in the statement. The move came after Reckitt’s CEO recently said that the Mead Johnson acquisition had already benefited the group.
Low probability for deal
Reckitt Benckiser’s move leaves GSK as the only bidder for the business. John Boris, an analyst with Suntrust Robinson Humphrey, however, told Bloomberg that Pfizer could keep the business and revisit a possible sale in the future.
“There’s a low probability that they execute the transaction,” the analyst pointed out. The Telegraph meanwhile noted in its coverage of the news that the US pharma giant, which put the business up for sale in September, was reportedly hoping that it would attract a price tag of up to $20 billion (£14 billion).
As of 08:58 GMT, Thursday, 22 March, Reckitt Benckiser Group Plc share price is 5,916.00p.