“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business”, said Hugh Grant, MON Chairman and CEO. The company previously sought to buy Swiss pesticide maker Syngenta, but had to abandon the US$43.7 billion bid in August after the other company refused to agree to a deal.
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However, many remain skeptical the deal will happen in the first place, and though Monsanto’s stock has jumped since the proposals were first made, it’s still trading well below the offer price.
Shares of Monsanto were recently up 1.9% to $108. On Monday, Bayer came out with an unsolicited offer to buy for $62 billion.
Prior to Monsanto’s announcement, Bloomberg reported that Monsanto’s board unanimously rejected Bayer’s offer in search of a higher price and more negotiating time, citing persons who asked not to be identified because the deliberations are private. Bayer shares had tumbled on the news.
Bayer said it decided to make details of its proposal public after market speculation and investor inquiries about a potential deal. Mr. Baumann rejected suggestions from some investors that Bayer should instead try to forge a joint venture with Monsanto, saying this would have tax disadvantages.
Bayer’s global offer for Monsanto will trigger a mandatory open offer by the German firm in India. Or, he said, Monsanto would rather stick to its strategic vision, which has resulted in its share price going from the teens to comfortably above 0.
Mr Baumann said a tie-up would be an “extraordinary fit”, bringing together Monsanto’s genetically-modified seeds and Bayer’s crop protection products, with sales far exceeding those of their nearest rival, the merged Syngenta and ChemChina.
The German company said Tuesday it looks forward to further talks with Monsanto.
The offer, which values Monsanto’s outstanding shares – without accounting for debt – at about $53 billion, represents a 37 per cent premium to the May 9 closing price.
The company also sells conventional seeds for tomatoes, carrots and onions. The Saint Louis, Missouri-based company has confidence in its standalone plan and believes shareholders deserve a better offer, the people said. Dow Chemical is forging a $130bn business with DuPont. “Monsanto is a ideal match to our agricultural business”. Monsanto said then that its board of directors was reviewing the proposal.
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“At Bayer, we are passionate about tackling large societal challenges through innovation, science and with responsibility”, Bayer CEO Werner Baumann said in a video posted Tuesday.
