After engaging in private talks with Monsanto, Bayer raised its all-cash offer to Monsanto shareholders from $122 per share to $125 verbally on July 1 and in an updated proposal submitted to Monsanto on July 9 — that’s a $64 billion offer.
Monsanto acknowledged that it has received a revised, non-binding proposal from Bayer AG for a potential acquisition. According to a company news release, Monsanto’s Board of Directors will review the proposal, in consultation with its financial and legal advisors. The company reported that no further comments will be made until the board has completed its review.
Morgan Stanley & Co. and Ducera Partners are acting as financial advisors, and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Monsanto.
Bayer reports that it has “comprehensively” addressed Monsanto’s questions concerning financing and regulatory matters and is prepared to make certain commitments to regulators, if required, to complete the proposed acquisition of Monsanto.
“We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value,” said Werner Baumann, Bayer AG CEO. “Bayer is fully committed to pursuing this transaction.”
Bayer reaffirmed that its offer provides transaction certainty and would not be subject to a financing condition. A Syndicated Loan Facility Agreement sufficient to provide the entire transaction financing is ready and prepared to be co-underwritten by five banks (BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan).
Bayer remains confident in its ability to obtain all necessary regulatory approvals in a timely manner given complementary geographic and product portfolios. In addition to certain commitments to regulators, should they be required, Bayer has offered a $1.5 billion reverse antitrust break fee, reaffirming its confidence in a successful closing.
The German company believes that its offer fully captures the intrinsic value of Monsanto, and shares the synergy benefits that the combination would create. The revised offer represents a premium of 40 percent over Monsanto’s closing share price on May 9, 2016.
The specific terms of any definitive transaction agreement remain subject to the final approval of Bayer’s Supervisory Board.
