NEW YORK (The Deal) -- Seeds giant Monsanto (MON) is considering its next move after Swiss crop protection group Syngenta rebuffed a second takeover proposal that the St. Louis company had sweetened by injecting a $2 billion reverse breakup fee if any agreement collapses on regulatory grounds.
Monsanto amended its offer on Saturday, but left the value of the stock-and-cash bid unchanged at 449 Swiss francs per share ($479.44), or 41.7 billion Swiss francs ($44.3 billion) in total. Monsanto Chairman and CEO Hugh Grant said the companies' respective shareholders, customers and stakeholders appeared to like the takeover proposal and described Syngenta's lack of engagement as disappointing.
The $2 billion breakup fee was designed to "further demonstrate our commitment to this combination" and Monsanto's confidence that a fusion could clear regulatory hurdles, he said in a statement on Sunday.
But Syngenta said that aside from the breakup fee offer, the new proposal "represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters' moves."
"As such, we have reiterated our prior rejection of Monsanto's proposal," Chairman Michel Demaré and CEO Mike Mack wrote in a letter to shareholders on Monday.
Monsanto has "glossed over" transaction risks, the executives claimed. They maintained that the St. Louis group's proposal of "a pre-agreed and pre-announced package of horizontal divestitures" won't cut it with regulators, who may view the enlarged group as a conglomerate and vet the combination accordingly.
A deal which then collapsed would cause "significant harm and value destruction for Syngenta and its shareholders" and "requires a careful assessment of all risks and a clear path to closing, and is in no way adequately addressed by a paltry reverse regulatory break fee relative to such fees seen in transactions with comparable levels of regulatory risk," added the executives.
They said advisers for the two companies had met three times since Monsanto's May proposal to hammer out the regulatory issues.
Syngenta on May 8 first rejected the 41.7 billion Swiss franc offer, claiming it was too low and would require significant disposals, such as Syngenta's U.S. seed business, to win regulatory approval.
Syngenta representatives couldn't be reached for additional comment on Monday. Monsanto spokeswoman Sara Miller said the U.S. company wouldn't comment on its next steps as it prepared a formal response to Syngenta's latest missive.
Syngenta shares in Zurich were down marginally at 410.20 Swiss francs by mid-afternoon.
Syngenta is the world's No. 1 crop science company and the third-largest seeds producer. Monsanto is the global seeds leader.
Some analysts have speculated that Germany's BASF and Bayer as well as Dow Chemical (DOW) and DuPont Co. (DD) and even China National Chemical may enter the bid fray.
But Deutsche Bank analyst Virginie Boucher-Ferte noted last month that as Syngenta only had about 8% of the global seeds market, compared with Monsanto's 25%, antitrust issues wouldn't be "insurmountable." She said the combination would make long-term strategic sense for Monsanto.
The stock-and-cash bid was 43% higher than Syngenta's undisturbed share price as of April 30, Monsanto noted.
Neither company on May 8 disclosed the exact per-share breakdown of the initial bid but both said it contained 45% cash.