As per the latest update released recently, Monsanto Company (NYSE:MON) has rejected Bayer AG (ADR)(OTCMKTS:BAYRY)’s takeover offer valued at $55 billion, leaving the company to determine whether to increase its bid in its quest to advance the world’s largest producer of pesticides and seeds.
Stating the bid as “financially inadequate,” Monsanto said that they are open for further discussions with Bayer about a deal. In response to the latest decision, Bayer said that they are “disappointed”, terming the revised all-cash deal a “compelling opportunity” that “shows certain and immediate value for Monsanto stakeholders amidst recent weak operational performance.”
It’s the second time when Bayer AG offer has been rejected by Monsanto. Prior to this rejection, the company rebuffed a $122-a-share proposal in May. Bayer had pursued to get access to core Monsanto data with an increased bid, and last week revised its proposal to $125 per share. This proposal showed a 40% premium from the closing price of stock on May 9, before the firm made its first proposal.
The analysts believe that Bayer’s posed with the question that how much it will have to pay to get a look at Monsanto’s books. Bayer has the funding available to increase its bid to nearly $158 a share. Acquiring Monsanto would give company a leader of crop biotechnology and the largest seed supplier. The type of genetically modified seeds, the seed supplier initiated to market two decades ago now form the majority of soybeans and corn cultivated in the U.S. Also, Monsanto offers seeds in different foreign markets including India and Latin America.
Bayer has faced pressure from certain investors that it may pay more for closing this deal. There’s a probability that Monsanto may select another suitor that’s restructuring the agricultural chemicals industry. Bayer’s proposal marks a role reversal for the U.S. firm.