US agribusiness leader Monsanto on Wednesday abandoned pursuit of Swiss rival Syngenta, which had rejected a recently sweetened $US47 billion ($66 billion) offer.
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A combination with Basel-based Syngenta would have made Monsanto the world’s largest producer of farming chemicals, on top of its market-leading seed business.
Backing away from the deal meant a boost in share value for Monsanto, with its price jumping from $89.70 before Wednesday’s announcement to $95.28 25 minutes later.
According to a regulatory filing yesterday, the bid was turned down unanimously as the board thought it had not been given enough clarity on Monsanto’s estimate of total cost and revenue synergies; assumptions regarding net sales proceeds of seeds and traits; the nature and extent of regulatory covenants that it was prepared to offer; and assessment of risks and benefits from Monsanto relocating its legal headquarters to the UK. On a different note, The Company has disclosed insider buying and selling activities to the Securities Exchange, The officer (EVP, Global Strategy), of Monsanto Co /New/, Preete Kerry J had unloaded 27,580 shares at $119.37 per share in a transaction on April 15, 2015.
Monsanto Company (Monsanto) along with its subsidiaries, is a provider of agricultural products for farmers. It also confirmed it raised a reverse break-up fee offer to $3 billion. The 52-week high of Monsanto Company (NYSE:MON) is $126 and the 52-week low is $91.22. Markus Bächtold, a fund manager at Luzerner Kantonalbank, said he anxious about antitrust hurdles, despite Monsanto’s proposal to sell off Syngenta’s entire seed business and some weedkiller sprays to alleviate competitive overlaps. Some investors have criticized the management over not carrying out the talks properly. “It’s not the management who own the company, it’s the shareholders; the management need to remember that”, he said. Under Syngenta’s articles of incorporation, shareholders collectively holding 10% or more of the company’s stock also could call a special meeting sooner and set the agenda. This is a positive change from Monsanto Company’s previous quarterly dividend of $0.49. The analysts estimated a 30% probability of “a completed deal” for Syngenta despite Monsanto’s retreat. Two research analysts have rated the stock with a sell rating, nine have issued a hold rating and nine have assigned a buy rating to the company.
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Shareholders interviewed by The Wall Street Journal declined to say what path they might pursue, though Mr. Yockey of Artisan said his firm is “looking at all possibilities”. During the same quarter in the prior year, the company posted $1.62 EPS.
