German multinational seed and crop protection company Bayer has increased its offer for U.S. giant Monsanto Company by US$ 3 per share, while also offering a hefty payment if a deal falls through on antitrust grounds.
The bid represents a 2.5% rise on the previous rejected bid of US$ 122 per share, in addition to the US$ 1.5 billion reverse break-up fee now on the table.
In an announcement today, Bayer said it had engaged in private talks with Monsanto over the past several weeks, making the US$ 125 offer verbally on July 1 and formally on July 9.
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).
“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,” said Bayer CEO Werner Baumann.
“Bayer 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 Bayer statement added.
In a release, Monsanto confirmed it had received the revised offer.
“The Board of Directors of Monsanto will review the proposal, in consultation with its financial and legal advisors,” the release said.
“Monsanto will have no further comment until its Board of Directors has completed its review. There is no assurance that any transaction will be entered into or consummated, or on what terms.”