Bayer-Monsanto: Biggest deal of 2016 expected to turn hostile if no agreement is found

William Turvill
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Bayer Seeks To Acquire Monsanto
Bayer has had two Monsanto bids rejected as "financially inadequate" by Monsanto (Source: Getty)

German chemicals company Bayer is expected to turn its Monsanto takeover attempt hostile if its latest offer comes to nothing.

US GM seeds firm Monsanto has already rejected two bids from Bayer, the first at $122 per share, equal to around $62bn, and the second at $125.

Read more: How shareholders feel about Bayer's "determined" pursuit of Monsanto

German newspaper Handelsblatt today reported that Bayer may be prepared to go hostile if no agreement is made in the coming weeks, citing sources close to the deal.

Markus Manns, portfolio manager at Union Investment, a top 20 Bayer shareholder, also predicted a hostile approach from Bayer might be the next step.

He said: “It is clear that Monsanto is trying to increase the price as much as possible. The longer it takes, the higher the price will be.

“Bayer is interested in starting negotiations/ due diligence as soon as possible, whereas Monsanto would like to slow down the entire process.

“The next step will be for Bayer to start a hostile takeover which might end up in a friendly takeover.

“Bayer is motivated as before to realise the deal.”

Read more: Monsanto knocks back "financially inadequate" Bayer offer... again

He added: “It is clear that Bayer has to increase the price further. We think that Bayer should stop at $135, otherwise this is going to be too expensive.”

Andrea Williams, a senior fund manager at Royal London Asset Management, which is also a Bayer shareholder, told City A.M.: “It would seem that the negotiations have reached a crucial phase. I still feel that [Bayer chief executive] Werner Baumann would prefer an amicable solution, it is unusual for European companies to go hostile to acquire.”

Williams also said she would not want Bayer to bid over $135 per share.

Bayer declined to comment.

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