USA TODAY International Edition
Monsanto spurns Bayer’s offer
Seed giant’s board rejects $ 62 billion acquisition bid
Agricultural and seed giant Monsanto has turned down German drug company Bayer AG’s $ 62 billion acquisition bid as “financially inadequate.”
Monsanto issued a statement Tuesday that its board of directors unanimously voted down Bayer’s proposal. However, the St. Louis- based company is open to continued talks with Bayer “to assess whether a transaction in the best interest of Monsanto shareowners can be achieved.”
Bayer on Monday offered $ 122 a share for Monsanto, a 37% premium over the closing price of $ 89.03 on May 9, which is the day before Bayer sent a written proposal to Monsanto.
Combining Monsanto, the world’s largest seed company, with Bayer’s crop protection products would create the world’s largest agricultural supplier.
As a combined company, the two chemical giants could reap $ 1.5 billion in savings after the third year, with additional benefits in future years, Bayer AG CEO Werner Baumann said Monday.
Monsanto’s opening to additional negotiations suggests that it sees the positive, too.
“We have long respected Bayer’s business,” Chairman and CEO Hugh Grant said in a statement. “However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition.”
No timeline has been set for more talks and there is “no assurance that any transaction will be entered into or consummated,” the company’s statement said.
Tuesday, Bayer said in a statement that it “looks forward to engaging in constructive discussions with Monsanto,” but said that its curtain offer “provides full and certain value for Monsanto shareholders.”
In describing Bayer’s bid on Monday, Edward Jones materials analyst Matt Arnold said that Bayer did not give Monsanto “an offer that can’t be refused.”
On news Tuesday that Monsanto had turned down the bid, Arnold said that “Monsanto’s rejection of the initial offer was what we expected.”