According to Reuters:
Bayer said on Wednesday it won over Monsanto’s management with a $128 per share offer in cash, worth about $66 billion including debt, to take over the global seed market leader.
That $128 offer represents a nearly 21% premium over MON’s Tuesday closing price of $106.10. The deal also includes a payout provision should antitrust regulators block the acquisition:
The companies have agreed on an antitrust break fee of $2 billion and the deal is expected to be closed by the end of 2017, the German group said in a statement.
With interest rates historically low, and banks all too eager to hand out loans, Bayer shouldn’t have too much trouble financing the deal. What’s more, investors continue to clamor for corporate debt in the hunt for yield:
Bayer intends to finance the transaction with a combination of debt and equity. The equity component of approximately $19 billion is expected to be raised through mandatory convertible bonds and a rights issue, it added.
Monsanto shares rose $0.76 (+0.72%) to $106.86 per share in premarket trading Wednesday. Although MON was hoping to fetch $130 per share in the deal, $128 is obviously close enough to get the takeover done as the agricultural spaces continues to see big consolidation.