Monsanto’s response to Bayer’s takeover offer is no — for now.
The Creve Coeur-based seed company announced Tuesday that its board of directors views Bayer’s $62 billion acquisition proposal “as incomplete and financially inadequate.” However, the board is open to “continued and constructive conversations” with the German chemical and pharmaceutical company.
“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” Monsanto Chairman and CEO Hugh Grant said in a release. “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.”
Monsanto said it had not set a timeline for further discussions and that it would not make any other comment at this time.
Bayer initially made an unsolicited bid of $122 per share for Monsanto. The $62 billion price tag would have made it the largest acquisition ever by a German company.
That offer marked a 37 percent premium over the Creve Coeur company’s stock price before word of a potential deal leaked. News of Bayer’s bid caused an increase in Monsanto’s stock price and sent Bayer shares tumbling. Now, the German company faces the prospect of increasing a bid that has already raised concern among some investors.
Bayer’s pursuit comes amid consolidation across the agribusiness sector, with low commodities prices forcing companies to find new avenues to profitability.
Monsanto finds its role in this process reversed. The company spent most of 2015 looking to buy, making three unsuccessful bids for Swiss chemical company Syngenta. In February, Syngenta agreed to a $43 billion offer from China National Chemical Corp., known as ChemChina.