Improved Bayer offer for Monsanto fails to kill seeds of doubt around deal

William Turvill
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Bayer has improved on its $62bn offer for US company Monsanto (Source: Getty)

Analysts do not appear to believe US seeds company Monsanto will be interested in Bayer’s improved takeover offer.

The German company upped its offer from $122 to $125 per share on Thursday.

The Bayer statement came after it was reported that Monsanto was in talks with its German rival BASF, which itself came after describing the Bayer offer as “financially inadequate”.

Read more: German Bayer improves takeover offer for US GM seeds company Monsanto

Andrea Williams, a senior fund manager at Bayer shareholder Royal London Asset Management, told City A.M. she was not surprised by the improved offer, but does not expect it to tempt Monsanto.

“I am happy they did not go as far as $135-$140,” she said. “However I don’t think it will be enough – Monsanto management rejected the $122 offer as financially inadequate.

“Monsanto's share price [is] obviously trading below the initial offer and the management are not keen to open the books and seem to be keen to try and tie up with BASF.”

Read more: Monsanto turns attention to another German after "inadequate" Bayer offer

She added: “If they do get it for $125 then I feel that would be good for Bayer, they are playing a good game and not getting carried away with the second offer.”

In the US, CNBC quoted BB&T Capital Markets analyst Chris Kapsch saying: “I don't think they believe selling for $125 (per share) today is in the best interests of shareholders... and I do believe they are still considering being a consolidator and not a consolidee.”

Mark Connelly, an analyst at CLSA Americas, told CNBC: “We’re on record saying we don’t think there’s more than a 10 per cent chance that these two companies are coming together. We’re in an environment where Washington has been blocking a lot of deal lately.”

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