Mead Johnson Stock Up On $90/ Share Takeover Talks With Reckitt Benckiser

(RTTNews) - Mead Johnson Nutrition's (MJN) shares gained around 24 percent in the extended trading following the news that the nutritional products maker is in discussions with UK Consumer goods giant Reckitt Benckiser plc (RBGLY, RB.L), regarding a takeover proposal for $90 per Mead Johnson share in cash. The offer price values the infant formula maker at about $16.7 billion.

In a statement, Mead Johnson confirmed the news, in response to media reports and a subsequent statement released by Reckitt Benckiser. The company added that no agreement has been completed, and there are no assurances that any deal would result from these talks.

Reckitt Benckiser, the maker of household goods including Cillit Bang and Dettol, earlier said it is in advanced talks to acquire Mead Johnson.

The Wall Street Journal reported that the offer price of $90 per share represents nearly 30 percent premium to the price of the stock before it reported on the talks earlier in the day.

Mead Johnson has a market value of $12.9 billion as on Wednesday.

The company further said it does not intend to make any additional comments regarding the talks unless and until reaching a formal agreement or terminating the talks.

Mead Johnson manufactures infant formulas, children's nutrition and other nutritional products. The Company markets its portfolio of approximately 70 products to mothers, healthcare professionals and retailers in over 50 countries.

For fiscal 2016, the company's reported earnings per share were $2.92, and adjusted earnings per share were $3.40 on net sales of $3.74 billion.

Mead Johnson shares closed at $69.50 on Wednesday's regular trade, down 1.36 percent. However, following the news, stocks surged 23.74 percent in the extended trading to $86.