Monsanto, the world's largest seed company, has turned down Bayer AG's $62 billion acquisition bid as ''incomplete and financially inadequate.'' But as Hayley Platt reports, it is open to further negotiations.
It was a healthy offer but clearly not enough for U.S seeds firm Monstanto. It's turned down the $62 billion bid by Germany's Bayer saying it was "financially inadequate" It's left the door open but some say not wide enough. (SOUNDBITE) (English) FIDELITY WORLD INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "I think it remains quite doubtful that it will go ahead and I think the share price is telling us that so last night we saw Monsanto share price just above $112, the value of the Bayer offer is $122 so there's still quite a large gap there and clearly I think for Bayer to be successful for its bid it's going to have to offer quite a bit more than $122." And there's the problem. Some of Bayer's shareholders think the offer - already a third higher than Monsanto's stock value prior to news of the deal - was too high. They're worried Bayer is taking on too much debt and leaving its comfort zone. (SOUNDBITE) (English) FIDELITY WORLD INVESTMENT, INVESTMENT DIRECTOR, TOM STEVENSON, SAYING: "Bayer has a defensive and predictable health care business and I think that the concern is that is might be moving more into the more cyclical volatile area of agriculture. They see the commercial logic, the industry is consolidating, we've seen the deals with Syngenta and ChemChina, Dow Chemcials and DuPont and Bayer and Monsanto will want to be part of that process but on the right terms." Both sides see value in some sort of consolidation as low commodity prices hit farm incomes. But Monsanto won't say what price it wants and Bayer may not be willing to pay it.