Bayer and Monsanto appear no closer to an agreement than two months ago when the first offer by Bayer went public, according to a new analysis by the St. Louis Post-Dispatch. Bayer recently increased its offer to acquire St. Louis-based Monsanto to $125 a share, or $64 billion.
Edward Jones analyst Matt Arnold told the local newspaper he believes Monsanto’s board will not accept an offer for less than roughly $140 a share, and he does not think Bayer is willing to go that high. Arnold gets to more than $140 a share by taking Monsanto’s estimated operating earnings and multiplying them by 17. That’s the multiplier that Monsanto was willing to pay for Syngenta last year. Bayer’s offer falls short of that marker, meaning the offer values Monsanto less than the company values a competitor just a year ago. Monsanto said the second Bayer proposal was “financially inadequate and insufficient to ensure deal certainty.” Meanwhile, Bayer may not be willing to go much higher as shareholders would rather see Bayer invest in its pharmaceutical business.
From the National Association of Farm Broadcasting news service.