August 9, 2016


Bayer AG may bid higher price for Monsanto after due diligence



German chemical and pharmaceutical firm Bayer AG may offer another and higher purchase bid for US seeds maker Monsanto, depending on the outcome of its due diligence, Bloomberg reported.


According to the Bloomberg report, Bayer had signed confidentiality agreements to conduct due diligence on Monsanto, just weeks after Monsanto rejected Bayer's improved offer of US$125 per share.


The inspection of Monsanto's financial accounts may have been the result of what Bayer had earlier said as its "continued dialogue with Monsanto under an appropriate confidentiality agreement allowing access to additional information".


Earlier in June, Argus Research analyst Bill Selesky said Monsanto might be willing to increase its offer to $130 a share. Analysts at Sanford C. Bernstein, on the other hand, said Monsanto might decide to sell if Bayer raised its offer to $135 a share.


Monsanto described Bayer's latest $125-a-share offer as "financially inadequate" but said it remained open to "continued and constructive conversations".


Bayer had expressed disappointment over Monsanto's decision to reject its increased all-cash offer of $125 per share which, it said, represented a 40% premium over Monsanto's closing share price on May 9, 2016. "The revised all-cash offer is a compelling opportunity and represents immediate and certain value for Monsanto shareholders amid recent weak business performance and Monsanto's reduced mid-term outlook", it said in a statement on July 19.-Rick Alberto