Responding to Monsanto’s Views on the Proposal, Bayer said it is confident that it can address any potential financing or regulatory matters related to the transaction.
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At time of writing, Bayer was up 3.58 percent at $98.90, while Monsanto was up 2.57 percent at $108.72.
USA agribusiness giant Monsanto Co rejected Tuesday the US$62 billion takeover bid by Germany’s Bayer AG as too low, but said it was willing to entertain further talks on a merger.
Bayer will now have to decide whether to raise its bid, even as the company faces criticism from some shareholders that its United States dollars 122-per-share offer is already too high.
“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business”, Hugh Grant, Monsanto’s chairman and chief executive, said in the statement.
In addition, the chances of such a deal being approved from regulatory authorities, were also very slim with the antitrust bodies already reviewing two consolidation bids in the U.S. agricultural industry.
“The disclosed price is at top end of the limit and just about works out”, said Markus Manns, who oversees nearly $300 million at Union Investment GmbH, including Bayer shares, according to Bloomberg.
The reaction from Monsanto was expected as Bayer’s shareholders and analysts did not seem too enthusiastic for the deal. In a statement, the company said its board of director’s unanimously voted against the unsolicited proposal, which it deemed “incomplete and financially inadequate”.
The German group offered $122 a share in cash, making it the largest all-cash offer, according to Thomson Reuters data – just pipping InBev’s $60.4bn offer for Anheuser-Busch in June 2008.
The pressure is on global agrochemicals companies to consolidate as lower commodity prices hit farm incomes, and seeds and pesticide markets increasingly converge.
If successful, the deal would eclipse the planned combination of the agricultural units of Dow Chemical and DuPont, and would also become the biggest-ever corporate buyout by a German company. Their combination could also create cost-savings, estimated by Bayer at about $1.5 billion after the first three years.
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Despite its dominance in the seed business, Monsanto has become vulnerable to a takeover as a number of problems piled up this year.
