Monsanto Rebuffs Bayer Again
Monsanto (MON) on Tuesday rebuffed Bayer's sweetened offer to take out the company, calling last week's $63.5 billion revised proposal "financially inadequate and insufficient to ensure deal certainty."
The St. Louis-based target said in a July 19 statement that it remains open to continued and constructive dialogue with Bayer and other parties to evaluate potential transactions, though it contended that "there is no assurance that any transaction will be entered into or consummated, or on what terms."
Shares of Monsanto, listed on the New York Stock Exchange, slid less than 1% to $106.42 in Monday morning's trading session.
Bayer on July 14 boosted its all-cash offer for Monsanto to $125 per share, or $63.5 billion, from $122 per share, or $62 billion. Its latest bid equated to a 40% premium over Monsanto's closing share price on May 9.
Beyond a $3-per-share increase to its offer, last Thursday's proposal also included a $1.5 billion reverse breakup fee that Monsanto would receive should antitrust regulators block the the deal. The German chemical and pharmaceutical company also promised that debt financing to support the entire offer was in place.
The two parties have been engaged in private conversations for a number of weeks, during which the target's management expressed its concerns about antitrust hurdles as well as Bayer's ability to raise the needed cash given opposition by the Leverkusen, Germany-based bidder's shareholders to an equity increase.
Bayer's sweetened bid for Monsanto on July 14 came amid new reports that suggested the latter is also weighing a potential acquisition of the agricultural solutions division of Germany's BASF SE. While Bloomberg reported that an acquisition of the business is one of several transactions Monsanto is exploring, an analyst told The Deal that the potential BASF transaction was unlikely to take place given that the German company has been outspoken about its desire to hold on and build up the unit.
The fusion of Monsanto and Bayer would create the world's largest agricultural chemicals and seeds company, and would have generated €23.1 billion ($25.5 billion) in sales last year, compared with €14.8 billion for China National Chemical Corp./Syngenta AG, €14.6 billion for Dow Chemical Co. (DOW)/E.I. du Pont de Nemours and Co. (DD) and €5.8 billion for BASF.
Syngenta earlier this year agreed to be acquired by China National Chemical for Sfr44.6 billion ($45.2 billion). Rivals Dow and DuPont previously agreed to combine in a $130 billion deal.