Monsanto rejects Bayer’s $62-bn bid, says offer inadequate

Monsanto, the world's largest seed company, on Tuesday said that its board of directors has unanimously rejected Bayer AG's $62-billion acquisition bid as "incomplete and financially inadequate", but said it was open to engage further in negotiations.

Monsanto said it is ''open to continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved.''

''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. ''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 company, however, said there is no assurance that any transaction will be entered into or consummated, or on what terms. The Monsanto board of directors has not set a timeline for further discussions and Monsanto does not intend to make further comment at this time, it added.

Bayer, however, said its $122 per share offer represents "full and certain value" for Monsanto shareholders, but that it looks forward to engaging in constructive discussions with Monsanto.

"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," Bayer chief executive officer Werner Baumann said in a statement.
 
Manning & Napier Advisors LLC, an investment management firm and one of Monsanto's largest shareholders, is backing Monsanto's decision to seek a higher offer.

Monsanto approached Bayer in March to express interest in its crop science unit, proposing options of an outright acquisition of the crop science unit and a joint venture, or other type of partnership between the two companies.

Bayer moved fast as German rival BASF had previously considered a tie-up with Monsanto, making an unsolicited bid - the largest all-cash takeover on record.

Bayer said it would finance its cash bid with a combination of debt and equity.

Morgan Stanley & Co. and Ducera Partners are acting as financial advisors, and Wachtell, Lipton, Rosen & Katz is acting as legal advisor, to Monsanto.