Bayer said it was disappointed with Monsanto’s decision to reject its latest offer but was looking forward to continued dialogue with Monsanto under an appropriate confidentiality agreement that would allow access to additional information.
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In a press release, Bayer said it’s “disappointed in Monsanto’s decision to reject its increased all-cash offer of United States dollars 125 per share, which represents a 40 percent premium over Monsanto’s closing share price on May 9, 2016”.
While Monsanto has turned down the offer, they said they are open to further talks with the German healthcare and chemicals group as well as other parties.
Monsanto called Bayer’s bid last week of 125 per share, up from the prior 122 per share, “financially inadequate” to ensure a deal.
Just six months ago, Monsanto, the world’s largest seed company, was still painting itself as a predator, saying it would continue to seek acquisitions in crop chemicals after failing to buy Syngenta in August.
On the face of it, sure, Bayer’s $125 a share doesn’t sound too bad – it represents a 17% premium to where Monday shares are trading now (around $106.90).
Some Monsanto investors have said Monsanto merits a higher valuation from Bayer, despite its recent struggles in the slumping farm economy. Bayer also would need to issue billions of dollars in new shares to fund a deal.
Bayer also has not offered a big enough break-up fee, Zekauskas said.
In Frankfurt, the immediate stockmarket reaction was to lift Bayer shares from E91.73 before the announcement to E92.34, reducing losses on the day to 0.6%. Bloomberg News reported last week that Monsanto might entertain a deal with another German chemicals giant, BASF SE.
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In a statement Bayer reacted with disappointment, and a pointed reference to difficulties within Monsanto. Last week the two companies were reportedly in talks about potential transactions, including the possible purchase of BASF’s agricultural solutions business. Syngenta has agreed to be taken over by ChemChina for $43 billion and Dow Chemical and DuPont merged for around $130 billion. Switzerland’s Syngenta AG – which Monsanto unsuccessfully pursued previous year – – agreed in February to a $43 billion takeover by China National Chemical Corp. Monsanto said last month net income tumbled more than 37 percent to $717 million in the quarter ended on May 31.
