Monsanto rejects Bayer’s $65-bn offer also, says open to talks

19 Jul 2016


US biotech and seeds major Monsanto Company has rejected German pharma and chemical major Bayer AG's revised takeover offer saying it was financially inadequate and insufficient to ensure deal certainty, but offered to constructively engage in discussions for any future transactions.

The German drug and chemicals company last week boosted its offer from $62 billion, to about $65 billion, or $125 per share. On Tuesday, Monsanto Co called the revised offer inadequate, as in the case of the initial bid.

Monsanto said its board of directors unanimously viewed Bayer'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,'' it added.

Bayer had on Thursday last, increased its bid by $3 per share to $125 per share, making it the largest-ever all-cash bid for any company. It also offered a $1.5-billion reverse antitrust breakup fee.

Monsanto also said in a statement Tuesday that it's still open to further ''constructive conversations" with the German company and other parties about a deal. Monsanto's shares fell 1.4 percent to $104.96 at 8:35 a.m. before the start of regular trading in New York.

Reports, meanwhile, said the St Louis-based Monsanto might entertain a deal with another German chemicals giant, BASF SE.

Buying Monsanto would give Bayer a company that's both the world's largest seed supplier and a pioneer of crop biotechnology. The kind of genetically modified seeds that Monsanto started to commercialise two decades ago now account for the majority of corn and soybeans grown in the US. Monsanto also sells seeds in foreign markets, including Latin America and India.

Despite its preeminence in seeds, Monsanto has become vulnerable because of disputes with the governments of Argentinia and India and clashes with some of the world's largest commodity-trading companies.

Last month, Monsanto said year-end earnings would settle at the lower end of guidance.

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