Bayer raises bid for Monsanto to $125 per share

Bayer raises bid for Monsanto to $125 per share

Monsanto rebuffed earlier $122 a share offer.

by Chitra Somayaji

Bayer AG raised its offer for Monsanto Co. after being rebuffed in its initial bid to combine operations and become the world’s biggest supplier of farm chemicals and seeds.

Related: Monsanto due diligence looms as next step in Bayer deal push

The offer was increased to $125 a share in cash, Leverkusen, Germany-based Bayer said in a statement on Thursday. Bayer had initially offered to pay $122 a share on May 10 in a deal that valued Monsanto, the world’s largest seed supplier, and its debt at $62 billion. That offer was rejected on May 24 as “incomplete and financially inadequate.”

Bayer AG raised its offer for Monsanto to $125 a share from $122 a share. (Photo: moodboard/Thinkstock)

The increased price represents a 40% premium over Monsanto's closing share price on May 9.

“We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value. Bayer is fully committed to pursuing this transaction,” said Werner Baumann, CEO of Bayer AG, in a media statement.

The increased price may make a takeover more palatable for Monsanto shareholders while simultaneously stoking concerns among Bayer investors about the deepening financial strain on the German company. Buying Monsanto would give Bayer a controversial pioneer of crop biotechnology that is reviled in Europe.

In a statement, Bayer says the deal would not be subject to a financing condition. Five banks, Bank of America Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan, will co-underwrite the transaction.

Related: Monsanto rejects Bayer’s $62 billion bid

Monsanto has revived talks with BASF SE about a possible combination of their agrochemicals businesses, people familiar with the matter said this week. The U.S. company is exploring various transactions, including the potential acquisition of BASF’s agriculture-solutions unit, the people said, asking not to be identified as the discussions are private. In return, Germany’s BASF would likely receive newly issued shares in Monsanto, the people said. Discussions are at an early stage, and no final decisions have been made as talks with Bayer are continuing, they said.

Related: Bayer bids $62 million for Monsanto

To contact the reporter on this story:

Chitra Somayaji in London at [email protected]

To contact the editors responsible for this story: Chitra Somayaji at [email protected]

Kristen Hallam

© 2016 Bloomberg L.P
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