UPDATE 1-Bayer shuns bidding war with Reckitt over Schiff

Tue Nov 20, 2012 6:56am EST

* Bayer: Outbidding Reckitt wouldn't meet its M&A criteria

* Says to continue looking for bolt-on acquisitions

* Reckitt offered $1.4 bln, above Bayer's $1.2 bln

FRANKFURT, Nov 20 (Reuters) - German drugmaker Bayer AG gave up trying to buy Schiff Nutrition after Reckitt Benckiser made a higher offer for the U.S. vitamin maker.

"Bayer AG's Board of Management has decided not to propose any increase" to its offer, the group said in a filing with the U.S. Securities and Exchange Commission published on Tuesday.

Reckitt trumped Bayer's agreed $1.2 billion deal to buy Schiff with an offer of $1.4 billion for the U.S. vitamin maker.

"Entering a competitive bidding process in response to the November 18 Proposal (Reckitt's bid) would result in a price outside Bayer's set financial criteria," the filing said.

Bayer plans to continue its strategy to augment organic growth with strategic bolt-on acquisitions, it added.