Monsanto’s Board of Directors Nixes Bayer’s Offer

Bayer will need to stretch its checkbook much wider if it wants to buy Monsanto. On Tuesday, Monsanto announced its board of directors viewed the $62 billion cash offer as “incomplete and financially inadequate.” 

However, Monsanto said the board is open to continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved.

“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” said Hugh Grant, Monsanto chairman and CEO in a company statement. “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.”

There is no assurance that any transaction will be entered into or consummated, or on what terms, the company said in a release. The Monsanto board of directors has not set a time line for further discussions, and Monsanto does not intend to make further comment at this time.

Meanwhile, Bayer announced in a separate statement that it looks forward to “engaging in constructive discussions with Monsanto regarding the proposed transaction.” Bayer officials said its $122-per-share all-cash proposal provides full and certain value for Monsanto shareholders. 

“We are pleased that Monsanto’s board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society,” said Werner Baumann, CEO of Bayer AG in a statement. “We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction.” 

Shareholders of both companies responded favorably to the news. Bayer shares rose 2.81% in Tuesday’s trading, up $2.69 to $98.17 at the day’s close. Meanwhile, Monsanto shares rose $3.30, a 3.11% rise in the company’s $109.30 closing price.