SSL International, the maker of Durex condoms, yesterday pulled out of talks with the venture capitalists 3i Group over the £200m sale of its surgical gloves and antiseptic scrubs business.
The company said it had failed to agree a price and proceeds from any sale would now be lower than the market is expecting.
Investors have long suspected problems with the sale process, which SSL had originally promised would be wrapped up by the end of December, but its shares fell 4 per cent yesterday to 296.75p.
Brian Buchan, the chief executive, said: "It is a very complicated transaction. As a global business it is complicated to extract from SSL, and it is difficult for another company to understand how to manage it."
There have been problems carving out global businesses based on product category from SSL's country-based organisational structure. Mr Buchan added that negotiations had been complicated by the decline of the dollar, in which the Regent Biogel gloves business makes the majority of its sales.
SSL announced yesterday the second of four disposals which will rid it of its non-consumer brands and allow it to concentrate on boosting profits from condoms and the Scholl range of foot-care products. It is selling its wound management division to Apax Partners for £55m, generating a pre-tax loss of £8m. Together with the earlier sale of the Marigold Industrial gloves unit, the process has so far raised £75m to pay down debt.
But it is the Regent and Hibi antiseptics disposal that will transform SSL. Mr Buchan said yesterday the company was in active talks with an alternative bidder, and that he hoped a deal could be done by the end of April. He refused to be drawn on what would happen if those talks also ended in failure. "We are keen to move on. I think that a reasonable agreement can be reached. We are concentrating on plan A," he said.
Investors are hoping that the completion of the disposal programme will trigger a bidding war for what will then be a focused consumer healthcare group. Reckitt Benckiser made an initial approach to the group last year, but the talks were abandoned.Reuse content