Bayer Ups its Takeover Offer of Monsanto to $127.50/Share

Agricultural products and seed maker Monsanto Company (NYSE:MON) received a higher bid over the holiday weekend from German pharma giant Bayer.

Bayer lifted its offer to $127.50 per share from a prior $125. That higher bid relies on reaching a “negotiated transaction,” said the company. The new offer represents a $65 billion valuation, and a 16% premium to MON’s Friday closing price of $107.44 per share.

Talks have been ongoing between the two firms since mid-May. Monsanto responded to the news via statement:

“Monsanto is continuing these conversations as it evaluates this proposal, as well as proposals from other parties and other strategic alternatives to enable its Board of Directors to determine if a transaction in the best interests of its shareowners can be realized.”

Monsanto likely has few other potential buyers, and its business has been hurt recently by a downturn in the agriculture sector, where very strong crop yields have pushed the prices of many foods down to multiyear lows. Farmers have responded by slashing costs, including on many of the products that MON sells. Monsanto has shed around 16% of its global workforce and reined in a number of projects as a result.

MON-2016-09-06

Monsanto shares rose $2.46 (+2.29%) to $109.90 in premarket trading Monday. MON has risen about 9% year-to-date, compared with a 7% gain in the S&P 500 during the same period.