Reckitt is continuing its move into the healthcare arena. Along with the cost synergies which Reckitt will gain, the deal pushes open wide the door to the emerging markets. Investors are happy to give the company the benefit of the doubt. In all, market consensus opinion continues to denote a buy.
CLIVE BLACK | SHORE CAPITAL
While the price is demonstrably high, Reckitt’s management has earned investor trust and faith through the performance that it has generated from acquisitions to date. We continue to believe that Reckitt’s is a high quality company. The price paid reveals the strength of consumer brands.
GRAHAM JONES| PANMURE GORDON
The acquisition provides Reckitt with a strong strategic position in one of the fastest growing global healthcare markets. We expect that there will be some cost savings to come out quickly but top line synergies tend to take time to materialise. The acquisition is to be funded from existing facilities; borrowing costs for Reckitt are very low.
We reiterate our Buy recommendation.