Tuesday, 29 December 2015

RARE alert: Reckitt Benckiser said to be working with Robey Warshaw on major deal

Rakesh Kapoor, chief executive of FTSE 100-listed Reckitt Benkiser, has been talking up the prospects of doing some major M&A in 2016.

Indeed, a few weeks ago Morgan Stanley analysts quoted Mr Kapoor as saying:

"If any of the interesting consumer-health assets were to come up for today, I believe Reckitt Benkiser has the capacity to do it. Any of them."

That's pretty punchy stuff from Kapoor.

And now it would appear the household goods giant is on the cusp of doing a major deal as City sources recently told me that Reckitt Benckiser has been working with uber investment bankers Robey Warshaw on a sizeable corporate transaction.

As regular readers know, Robey Warshaw - founded by Simon Robey and Simon Warshaw - have picked up two of the largest defence mandates of 2015, advising BG Group on its £40 billion sale to Royal Dutch Shell and SAB Miller on its £75 billion sale to Anheuser-Busch Inbev.

To be clear, I don't have any visibility on which deal Reckitt Benckiser, whose regular advisers are Morgan Stanley and Deutsche Bank, is working on. However, according to my sources, it sounded like the transaction Robey Warshaw has been advising on is more likely to be an acquisition/merger rather than a defence of the business.  

Back in September analysts at Exane BNP Paribas theorised that that if Pfizer pursued a merger with another drugmaker (which it subsequently has), then the US drugs giant would sell its consumer health unit, possibly to Reckitt Benckiser. Here is a link to Bryce Elder's stock market report which first reported Exane BNP Paribas's speculation:


Or, perhaps Reckitt Benckiser is working with Robey Warshaw on a completely different deal. I'm sure the market will find out in 2016...

A spokesperson for Reckitt Benkiser declined to comment.

This story has a RARE tag (although I would say this is some pretty well cooked RARE). For readers unfamiliar with RARE, here is the definition:

Market gossip that hasn't been tested through formal journalistic channels (public relations executives, bankers etc). The rumour might be total codswallop but then again there may be something in it, so it's worth airing on Betaville. 

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