Monsanto Knocks Back Bayer For Second Time Deeming $64bn Offer “Financially Inadequate”

Bayer said it was "disappointed" by Monsanto's latest rejection - which at $125 a share it said amounted to a 40 percent premium on Monsanto's share price- but said it was "looking forward to continued dialogue" with the St Louis-based company.

 

The German company will now have to decide whether to raise its bid a third time in its attempt to create the world's biggest agrochemicals group.

 

According to Bloomberg, analysts believe it has the financial muscle to raise it to $158 a share, but some analysts believe that the Monsanto board would agree to an offer above $130 a share.

 

Bayer is likely to be concerned that it could be beaten to the deal by a rival, with some speculating that BASF could make a bid amid consolidation across the industry.

 

Bringing together Bayer and Monsanto would form a company with a diverse portfolio making products such as Aspirin, Alka-Seltzer and crop genetics and a range of agricultural products.
 
It would mean that Bayer could tie-up its crop science franchise with Monsanto’s biotechnology and seed products, including its chemical spray Roundup.

 

According to Morgan Stanley, the combined entity would control around 28 percent of the world's pesticides and 36 percent of US corn seeds.

 

Monsanto said: "Its board of directors unanimously views Bayer AG’s revised proposal as financially inadequate and insufficient to ensure deal certainty.”

 

“Monsanto remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction that the Board believes is in the best interest of Monsanto shareowners can be realized. There is no assurance that any transaction will be entered into or consummated, or on what terms.”

 

Bayer said: "It is disappointed in Monsanto’s decision to reject its increased all-cash offer of USD 125 per share, which represents a 40 percent premium over Monsanto’s closing share price on May 9, 2016. “

 

“The revised all-cash offer is a compelling opportunity and represents immediate and certain value for Monsanto shareholders amid recent weak business performance and Monsanto’s reduced mid-term outlook."

 

“Bayer reaffirmed that its offer would not be subject to a financing condition. In addition, Bayer has offered a USD 1.5 billion reverse antitrust break fee, reaffirming its confidence in a successful closing.”

 

“Bayer is looking forward to continued dialogue with Monsanto under an appropriate confidentiality agreement allowing access to additional information.”