Bayer isn't letting Monsanto off the hook with a $55 billion takeover offer (mon)

Thomson Reuters

Bayer is not letting Monsanto off the hook.

The German company on Thursday said it had boosted its all-cash offer for Monsanto, the maker of Roundup, to $125 per share from $122.

That's about $55 billion in cash, meaning that a deal — if agreed — would be the biggest of the year so far.

Monsanto shares rose about 2.5%, to $103.65, as of 12:35 p.m. ET Thursday — still well below Bayer's new offer.

Monsanto in May rejected Bayer's first offer, saying "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."

Bayer says it has since held private talks with the company and has "comprehensively addressed Monsanto's questions concerning financing and regulatory matters and is prepared to make certain commitments to regulators."

It said it's willing to pay Monsanto $1.5 billion if the deal is blocked on antitrust grounds.

Importantly, Bayer says it submitted its new offer verbally on July 1 and formally on July 9 — five days before Thursday's public announcement.

Thomson Reuters

The announcement follows news on Wednesday that Monsanto was exploring a potential transaction with the German chemicals producer BASF. Monsanto was interested in buying BASF's agriculture-solutions unit, according to Bloomberg.

In other words, Bayer just spent weeks in private talks with Monsanto only to see that company try to make an acquisition of its own. So now it's turning to the shareholders.

"We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value," Bayer CEO Werner Baumann said in the statement. "Bayer is fully committed to pursuing this transaction."

After Bayer made its first offer, Baumann said, "we fully expect a positive answer of the Monsanto board of directors" — which is not something he reiterated this time.

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