Growth premium

24 May 2016 By Kevin Allison

The U.S. seed producer rejected a $62 bln offer from the German chemical giant, but said it was open to talks. Bayer’s shareholders reacted poorly to the initial bid while Monsanto investors are skeptical about chances for a deal. Negotiating power is limited on both sides.

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Monsanto on May 24 said its board had unanimously rejected a $62 billion takeover bid from Bayer, the German chemical conglomerate. The St. Louis-based biotech seed maker called Bayer’s $122 a share all-cash offer “incomplete and financially inadequate,” but said it was open to “continued and constructive conversations” about a potential deal.

Monsanto’s shares gained 2.6 percent, to $108.83 apiece, in afternoon trading after it issued the statement. Bayer’s shares increased 3.2 percent on May 24 after Reuters reported that Monsanto was poised to reject the offer. Bayer’s shares have fallen nearly 13 percent since news of its interest in bidding for Monsanto was reported on May 10.

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