NEW YORK (TheStreet) -- Shares of Monsanto (MON) were higher in pre-market trading on Tuesday as Bayer (BAYRY) said late yesterday it was still in advanced negotiations to acquire the agricultural giant for up to $127.50 per share, or a 2% increase over its prior offer in July.
Additionally, Monsanto has agreed to open its books for the German company to conduct due diligence checks on its business, sources told Reuters.
Both sides are gradually approaching consensus, a source added.
"We infer from Bayer's statement that failure to agree a deal at $127.50/share could imply a risk to Monsanto shareholders of either a hostile bid at a lesser consideration, or no deal at all," brokerage Equinet said in a note cited by Reuters.
Late yesterday, St. Louis-based Monsanto confirmed it was engaged in constructive negotiations with Bayer.
"Monsanto is continuing these conversations as it evaluates this proposal, as well as proposals from other parties and other strategic alternatives to enable its board of directors to determine if a transaction in the best interests of its shareowners can be realized," the company said in a statement.
Bayer is still considering all options, including a friendly deal, a hostile bid or pulling its offer, Reuters said, citing a source.
Separately, TheStreet Ratings Team has a "Buy" rating with a score of B on Monsanto stock.
The company's strengths can be seen in multiple areas, such as its good cash flow from operations, expanding profit margins and increase in stock price during the past year.
The team believes its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MON