Bayer does not give up and continues the battle to conquer Monsanto. The German giant has raised its cash offer for the American group from 122 to 125 dollars per share, or more than 64 billion dollars. This was communicated by Bayer itself, which on 24 May had seen its initial proposal rejected because it was judged "incomplete and financially inadequate".
On that occasion, however, Monsanto also said it was "open to continuing constructive discussions to understand whether a transaction that is in the best interests of Monsanto's shareholders can be achieved." In the disappointing quarterly published June 29, Monsanto said talks were underway with Bayer and others to evaluate "strategic alternatives."
In the latest press release, Bayer explains that "in recent weeks" it has been involved in "private negotiations" with Monsanto. "Following the receipt of additional information", continues the note, the German group presented - first verbally on 1 July, then in writing on 9 July - its new offer, which includes a Bayer break-up fee of 1,5 billion dollars, an amount that the Germans will pay to Monsanto if the merger were to fall through for antitrust reasons.
Bayer says it is "ready to make certain commitments with regulators, if necessary, to complete the proposed acquisition of Monsanto." The German company is confident of "obtaining all the necessary regulatory go-ahead given the geographical and product complementarity" of the two groups. Bayer guarantees that the transaction is not subject to financial conditions and that the necessary cash is ready. There are five banks ready to sign it: BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan.
Werner Baumann, chief executive officer of Bayer, said in a statement that "the transaction is the best opportunity available to provide Monsanto's shareholders with certain, immediate and highly attractive value." Bayer believes the offer recognizes "Monsanto's intrinsic value," as it offers a 40 percent premium to Monsanto's closing stock price on May 9.
Complicating the operation is the possible inclusion in the Basf challenge. According to rumors, the American giant is studying the acquisition of BASF. The negotiations are in the preliminary stages, reflecting the rift within Monsanto's board of directors. In fact, the Board is divided between those who push for Bayer, others who bet on the other German Basf and those who push for an independent Monsanto. Monsanto, in the event that it decides to proceed with Basf, would find itself having to convince investors: in the face of a cash offer from Bayer, Monsanto to buy the agrochemical division of Basf would instead have to issue new shares.
At stake is the creation of the world's largest agrochemical and seed supplier.
