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Monsanto rejects Bayer’s sweetened offer, open to talks

Posted by: Admin | Posted on: July 19th, 2016 | 0 Comments

U.S. seed company Monsanto Co (MON.N) rejected a sweetened $125-per-share offer from Bayer AG (BAYGn.DE), but said it was open to continue talks with the German chemicals group as well as other parties.

Monsanto said on Tuesday its board unanimously viewed Bayer’s latest bid as “financially inadequate and insufficient to ensure deal certainty.”

“Monsanto remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction that the board believes is in the best interest of Monsanto shareowners can be realized,” the company said.

Bayer will examine Monsanto’s response to the revised offer, a company spokesman said.

The German company disclosed last Thursday that it increased its bid by $3 per share, making the $125-per-share offer the largest all-cash bid on record. It also offered a $1.5 billion reverse anti-trust breakup fee.

Monsanto’s shares fell 1.5 percent to $104.80 in premarket U.S. trading. Bayer shares were down 1 percent at 91.81 euros.

Access to confidential information has been a major sticking point in Bayer’s negotiations with Monsanto ever since the German company offered to acquire Monsanto in May.

Bayer argued last week that it had comprehensively addressed Monsanto’s questions about financing and regulatory matters and said it was prepared to make certain commitments to regulators, if required, to complete a deal.

Reuters reported on Monday that Monsanto would require Bayer to raise its offer further in order to agree to a sale.

The seeds and agrochemicals industry has been jolted by several large deals in the past year as low crop prices and belt-tightening by farmers pressured earnings.

Syngenta AG (SYNN.S), which Monsanto tried to buy last year, agreed in February to be acquired by ChemChina for $43 billion. Dow Chemical Co (DOW.N) and DuPont (DD.N) struck a $130 billion mega-merger late last year.

Morgan Stanley Co and Ducera Partners are Monsanto’s financial advisers and Wachtell, Lipton, Rosen Katz is its legal adviser.

Up to Monday’s close, Monsanto shares had risen 5.3 percent since Bayer disclosed its higher offer on July 14. Bayer shares have fallen about 1 percent in the same period.

(Reporting by Swetha Gopinath and Amrutha Gayathri in Bengaluru; Additional reporting by Matthias Inverardi in Duesseldorf; Editing by Savio D’Souza)

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