Markets raised, a little, the chances of Bayer acquiring US-based Monsanto, the world’s top seeds producer, after the German company said the groups were in “advanced” talks over a sweetened deal.
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Bayer in a statement said that it was prepared to offer $127.50 per share in connection with a negotiated deal, up from its previous offer of $125 per share. Excluding debt of about $9 billion, that values Monsanto at $55.8 billion, about $1 billion more than the previous offer.
“Monsanto is continuing these conversations as it evaluates this proposal, as well as proposals from other parties and other strategic alternatives to enable its Board of Directors to determine if a transaction in the best interests of its shareowners can be realized”.
Monsanto confirmed it has been in “constructive negotiations” with Bayer and that it received the latest offer.
Bayer’s shares were down 0.25 per cent at 94 euros by 0934 GMT on Tuesday. While the details have not been trashed out, Bayer said it would offer $127.50 a share to take over the United States seed group.
Energy companies are leading USA stocks higher Tuesday after a number of companies announced deals following the Labor Day holiday. It would also benefit from Monsanto’s regional strength in North America. To that end, it had pursued the purchase of Syngenta AG on at least three separate occasions over the years. Meanwhile, DuPont Co and Dow Chemical Co plan to merge and then carve out a new crop-science unit. Energy companies are making the biggest gains as investors hope for a deal that could limit oil production and send prices and company profits higher.
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Analysts at broker Baader Helvea said it believed a bid of $130-135 per share was needed “before Monsanto comes to the table”. It produced highly toxic polychlorinated biphenyls, known as PCBs, until the late 1970s, and was also among companies to manufacture the mixture of herbicides known as Agent Orange.
