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Bayer to go hostile with Monsanto bid?

August 17, 2016
Chemical Value Chain

Agchems consolidation: Bayer-Monsanto may go hostile. Bayer AG is considering a hostile bid for Monsanto Co. if the company rejects friendly offers, according to a report in the German business newspaper Handelsblatt.

“Bayer is prepared to turn directly to the shareholders” to acquire Monsanto, the paper reports, citing anonymous sources. Bayer CEO Werner Baumann said in a July statement that Bayer is “absolutely determined” to acquire Monsanto, a quote that the paper says “was a clear signal that Baumann was prepared to force through a deal, with or without the Monsanto board.”

Monsanto rejected a $125/share offer from Bayer on 19 July. That offer, revised slightly upward from Bayer’s original $122/share offer, valued Monsanto at $63.5 billion. Monsanto says it remains open to negotiating a deal, but analysts note that Bayer would likely need to raise its offer by several billion dollars to entice Monsanto to agree to a deal. Analysts also said in July that Bayer may go hostile with its offer.

Bayer shareholders have voiced skepticism about a Monsanto acquisition. A survey of Bayer shareholders in June found widespread dissatisfaction with the proposed deal, and one Bayer investor has called for a shareholder vote on it.

Reports in mid-July also linked BASF SE to Monsanto in a possible agchems combination. It is not currently clear whether Bayer intends to put forth another friendly offer for Monsanto, or when it may go hostile.

By Vincent Valk

Source: Chemical Week

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