Monsanto Rejects Initial Bayer Bid, Cites Offer as Too Low
ST. LOUIS, MO – After receiving Bayer’s initial bid for a $62 billion takeover, Monsanto rejected the offer yesterday. Monsanto said that the initial offer was too low, though it remains open to talks of future bids.
“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” said Hugh Grant, Monsanto Chairman and CEO, in an issued statement on the initial $122-a-share offer. “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.”
The Wall Street Journal said that although the move was expected of Monsanto, people familiar with the deal said it can’t be ruled out that Bayer may come back with a higher offer, and the rejection is putting pressure onto Bayer to increase its offerings despite some protests from company investors.
On its own behalf, Bayer said that it looks forward to continuing constructive discussions with Monsanto regarding the proposed acquisition, though it reiterated that its initial all-cash offer would provide full and certain value for Monsanto shareholders.
"We are pleased that Monsanto’s Board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society," said Werner Baumann, CEO of Bayer AG. "We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction."
The Wall Street Journal speculated that a union between the companies would transform the agricultural sector by creating the world’s largest seed and crop-chemical supplier, as well as a revamp to Bayer itself by increasing the company’s agricultural sales to over half of the company’s overall sales numbers.
Both companies stated that they did not intend to make further comments at this time, with Monsanto also asserting that it has not set a timeline for any further discussions.
Keep your cursor hovered over AndNowUKnow as we continue to report on this prospective buyout and any forthcoming acquisition bids.
