Reckitt Benckiser
Note: This is a daily stock update and the information stands true as of 18/09/24, 09:00 CEST.
Company Update:
Reckitt has launched early discussions with potential suitors for a sale of its homecare assets, which could be worth over £6bn ($7.89 billion), Bloomberg News reported on Tuesday.
As a reminder, in July, the firm had said it was considering options for its troubled nutrition business and looking to offload a portfolio of homecare brands (with revenue of £1.9bn in FY23) by the end of 2025.
Reckitt is reportedly working with Morgan Stanley on options for its homecare brands such as AirWick - air fresheners and Cillit Bang cleaners, while Goldman Sachs Group is helping on evaluating options for its formula brand Mead Johnson, the report said, citing people familiar with the matter.
The flagged value of £6bn for its homecare brands would be in-line with our previously flagged expectations, and coupled with a successful offloading of the nutrition business could generate £10-13bn in gross proceeds.
Expert Opinion:
In our SOTP, the discount to NAV is substantial (36%). While this was expected, the actual disposal of assets would be a good news. Indeed, disposal of asset at the expected price (€6bn for the brands mentioned is in line with our expectations) would mechanically trigger a reduction of the discount. With such disposals, Reckitt would become net cash positive and could increase the return offered to shareholder. I still see major upside on the name.
Note that the £6bn mentioned for homecare assets stands in our hygiene business section and represents c30% of the value of the division.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
Company Update:
Reckitt has launched early discussions with potential suitors for a sale of its homecare assets, which could be worth over £6bn ($7.89 billion), Bloomberg News reported on Tuesday.
As a reminder, in July, the firm had said it was considering options for its troubled nutrition business and looking to offload a portfolio of homecare brands (with revenue of £1.9bn in FY23) by the end of 2025.
Reckitt is reportedly working with Morgan Stanley on options for its homecare brands such as AirWick - air fresheners and Cillit Bang cleaners, while Goldman Sachs Group is helping on evaluating options for its formula brand Mead Johnson, the report said, citing people familiar with the matter.
The flagged value of £6bn for its homecare brands would be in-line with our previously flagged expectations, and coupled with a successful offloading of the nutrition business could generate £10-13bn in gross proceeds.
Expert Opinion:
In our SOTP, the discount to NAV is substantial (36%). While this was expected, the actual disposal of assets would be a good news. Indeed, disposal of asset at the expected price (€6bn for the brands mentioned is in line with our expectations) would mechanically trigger a reduction of the discount. With such disposals, Reckitt would become net cash positive and could increase the return offered to shareholder. I still see major upside on the name.
Note that the £6bn mentioned for homecare assets stands in our hygiene business section and represents c30% of the value of the division.
For daily updates, subscribe to our newsletter and for detailed daily updates, reach our to us at sales@alphavalue.eu
Subscribe to our blog
Alphavalue Morning Market Tip
Solid start of 2025 with signs of recovery in key markets.