Monsanto quiet about Bayer bid as revenue falls

Monsanto gave no official update about an acquisition bid from Bayer AG, a German multinational chemical and pharmaceutical company, during a conference call to discuss its third-quarter results on Wednesday.

Instead, Monsanto Chairman and CEO Hugh Grant expressed optimism in the company’s prospect with or without a deal. “It’s clear Monsanto remains the partner of choice in this industry,” Grant said.

Last month, the Creve Coeur-based agribusiness giant declined a $122-per-share, $62-billion cash offer from Bayer, calling the bid an undervaluation and indicating concern about financing and regulatory issues. The offer added a 37 percent premium to Monsanto’s stock price at the time.

Monsanto has kept the door open for a potential deal. If such a deal between the companies emerges, it would mark the largest foreign takeover by a German company. 

Sales dip and mixed outlook

For the quarter ending May 31, Monsanto reported earnings per share of $1.63, a tumble of more than 30% from last year’s third quarter. Net sales and gross profit dropped by 9 percent and 13 percent, respectively, compared with last year. Total sales slid 8.5% to $4.189 billion. Revenue from seeds and genomics, the company’s major business sector, increased 0.4% to $3.21 billion.

Some of the headwinds Monsanto faces include glyphosate price declines, Argentine-related tax matters, India cotton-pricing regulations, delayed launch of its Roundup Ready 2 Xtend soybeans, and lower soybean volume due to the delay.

Grant admitted the somewhat sluggish aspect of the current agriculture condition, but remained positive. The company expects moderate growth in annual earnings per share between fiscal 2017 and 2021.

“Our industry is running at a low point in the overall agriculture cycle and we’ve experienced an unforeseen level of challenges affecting our business,” he said. “Our long-term optimism within agriculture and our business remains.”

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