Monsanto Co. (NYSE:MON), has rejected an offer set by Bayer (ETR:BAYN) which was a $62 billion acquisition bid. The bid would have created the world’s biggest agricultural supplier. The company thought that the bid was “incomplete and financially inadequate” on Tuesday, but left the door open for a potentially higher bid. According to Monsanto’s chief executive Hugh Grant the bid would undervalue the company. According to Reuters the Bayer faces criticism from its shareholders that its $122-per-share cash offer is too high.
JPMorgan analysts wrote in a research note that “We believe it is unlikely that the deal gets done at $122 and still believe $135 is a more likely price.”
Monsanto shares rose to 2.5 percent to be worth $108.70 in late trading in New York. Bayer shares rose 3.23 percent at 87.15 euros in Frankfurt. According to Bayer its bid would be an “extraordinary opportunity to create a global agriculture leader.”
Monsanto Chief Executive Hugh Grant released a statement saying that “We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business.” He added that, “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.”
ChemChina plans to buy Switzerland’s Syngenta (SYNN.S) for $43 billion, after Syngenta rejected a bid from Monsanto. Also Dow Chemical co (NYSE:DOW.N) and DuPont (NYSE:DD.N) are combining to form a $130 billion business.
If Monsanto and Bayer merged it would have created commanding position in markets including the US, Europe and Asia.