Bayer Makes New Offer to Monsanto

In talks over the past several weeks, Bayer increased its offer to Monsanto, thereby providing certainty on financing and regulatory matters. Following receipt of additional information, Bayer verbally raised its all-cash offer to Monsanto shareholders from USD122 to USD125 per share on July 1 and in an updated proposal submitted to Monsanto on July 9, according to a press release from Bayer.

Bayer reaffirmed that its offer provides transaction certainty and will not be subject to financing conditions. A syndicated loan facility agreement, sufficient for providing the entire transaction’s financing, is ready and prepared to be co-underwritten by five banks (BofA Merrill Lynch, Credit Suisse, Goldman Sachs, HSBC and JP Morgan).

Bayer additionally offers a USD1.5bn reverse antitrust break fee, reaffirming its confidence in the successful closing of the deal.

“We are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value. Bayer is fully committed to pursuing this transaction,” stated Werner Baumann, CEO of Bayer AG.

Bayer noted that the revised offer represents a premium of 40% over Monsanto’s closing share price on May 9, 2016.

On the other hand, according to a press release, Monsanto acknowledged that it received a revised, non-binding proposal from Bayer AG for a potential acquisition of Monsanto. Monsanto’s board of directors will review the proposal in consultation with its financial and legal advisors and the company reserves further comment until a final decision has been made. There is no assurance that any transaction will be entered into or consummated, or on what terms.