Reckitt Benckiser avoids headaches in bid for Durex firm SSL International

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Reckitt — which also makes Dettol disinfectant and Strepsils throat sweets — offered Durex maker SSL investors 1171p a share in cash, including an 8p final dividend.

The surprise bid was 33% higher than SSL's closing price yesterday, and the offer was recommended by the board of SSL, which also makes Scholl foot lotions and sandals and had sales of £802.5 million last year.

SSL shares shot up 294p to 1176p, higher than the bid price, fuelling expectations of a counterbid, but analysts said Reckitt's price would be enough.

"We view this as a very good price for SSL shareholders, and an excellent strategic fit for Reckitt Benckiser," said Damian McNeela at Panmure Gordon.

Reckitt chief executive Bart Becht said the deal would boost revenues at the firm's health and personal care division by more than a third, to about £2.8 billion. He expects to cut £100 million in costs from the enlarged group.

Becht added: "The acquisition will also materially enhance the scale of Reckitt Benckiser's businesses in China and Japan.

"This, combined with the good growth potential of the SSL business, makes it an attractive acquisition for Reckitt Benckiser's shareholders."

Gerald Corbett, chairman of SSL, pointed out the offer was four times the level of SSL's share price five years ago, and added: "I am sure our brands and people will be in good hands."

The deal will see a £25 billion fees bonanza being shared by the City's investment banks.

Deutsche Bank was hired as an advisor to Reckitt, whilst JP Morgan Cazenove, Lazard and Credit Suisse were all signed up by SSL.