Yesterday, 2:21 PM
- Bayer (OTCPK:BAYRY -0.7%) could receive financing from the European Central Bank that would help to fund a takeover of Monsanto (MON +2%), according to a Reuters analysis of the terms of the ECB's bond-buying program.
- The ECB can buy bonds issued by companies that are based in the euro area, have an investment-grade rating and are not banks, provided that they are denominated in euros and meet certain technical requirements.
- The purpose for the bonds is not among the criteria set by the ECB, which will start buying corporate bonds on the market and directly from issuers next month, meaning that at at least in theory the ECB could buy debt issued by Bayer.
- Separately, Commerzbank upgrades Bayer to Buy from Hold, saying they like the "strategic rationale" of a MON takeover which could boost Bayer's adjusted earnings by 8% in the first full year after closing.
- Now read Monsanto upped to Buy at Jefferies, which sees Bayer deal "highly likely"
Yesterday, 9:14 AM
- Monsanto (NYSE:MON) +2.2% premarket as Jefferies upgrades shares to Buy from Hold with a $132 stock price target, raised from $95, seeing a $130/share or greater takeover by Bayer (OTCPK:BAYRY) as "highly likely."
- MON's response to Bayer "was far from a full-throated defense" and "benign enough to open the door for more productive discussions," Jefferies notes.
- The firm also believes favorable weather should drive price support for MON in 2017-20.
- Now read Bayer says it can meet Monsanto deal demands
Tue, May 24, 6:27 PM
- Bayer (OTCPK:BAYRY), responding to Monsanto's (NYSE:MON) earlier rejection of its $62B takeover offer, says it "remains committed to working together" to complete the deal and is "confident that we can address any potential financing or regulatory [concerns]" raised by MON.
- MON said earlier it regarded Bayer's $122/share offer as too low, but that it respects Buyer's business and believes in the potential benefits of a merger.
- MON "does not want to be acquired," but may give into pressure from its shareholders and accept an offer over $140/share, Bernstein analyst Jonas Oxgaard contends, while any deal below $140 is "reasonable" from Bayer's perspective, Deutsche Bank's Tim Race says.
Tue, May 24, 2:00 PM
- Monsanto (MON +2.8%) officially rejects Bayer's (OTCPK:BAYRY +3.5%) $62B takeover offer, confirming earlier reports, but says it remains open to further talks on a deal; shares have reached their highs of the day after a brief trading halt.
- MON calls the $122/share offer "incomplete and financially inadequate" that fails to address potential financing and regulatory risks, but also suggests that a higher bid might be accepted.
- Fox Business News' Charles Gasparino reports that Bayer could go hostile in its bid for MON.
Tue, May 24, 11:03 AM
- Monsanto (MON +2.8%) pops higher following a Reuters report that the company will reject Bayer's (OTCPK:BAYRY +1.5%) $122/share takeover bid and request a higher price.
- While MON sees industrial logic in a combination with Bayer and believes a deal would be approved by antitrust and other regulators, the company also has confidence in its standalone plan and believes shareholders deserve a better offer, according to the report.
- Now read Bayer remains a Buy at Deutsche Bank; says Monsanto deal makes sense
Tue, May 24, 10:36 AM
- Bayer (OTCPK:BAYRY +2.5%) is maintained with a Buy rating and a €124 price target at Deutsche Bank, which says the proposed merger with Monsanto (MON +1.2%) “makes both operational and financial sense.”
- The firm says Bayer’s shares could be significantly volatile in the near term as negotiations for MON play out, but the deal is a good strategic fit and is expected to be 11%-13% EPS accretive in 2019-20, which would contribute towards an annual earnings growth rate in the low-to-mid-teens.
- Deutsche Bank believes a takeover price for MON below $140 per share is reasonable for Bayer, with accretion breakeven at $149-$158.
Mon, May 23, 3:33 PM
- Monsanto (MON +5%) is up 5% to ~$106.70 following Bayer's (OTCPK:BAYRY -4.5%) offer to buy the company, but that's well below the reported takeover price of $122 that Bayer says it is willing to pay, indicating skepticism that the deal will come to fruition.
- Bayer's move defies sharp criticism from some investors (I, II) ahead of the official news of the offer, which CEO Werner Baumann describes as "an uneducated reaction in the media" when deal terms were not yet known, adding that "we are putting forward a very, very full price" for MON.
- But Berenberg analyst John Klein says MON and its shareholders likely will argue that based on 2017 EBITDA expectations, the bid would represent a multiple of only 14x vs. the nearly 16x ChemChina agreed to pay for Syngenta.
- Citi's P.J. Juvekar appears to reflect the consensus view that the chances of a deal becoming finalized have increased with a firm offer on the table but that the first offer likely will not get accepted.
- Bloomberg's Brooke Sutherland believes MON's lack of an outright rejection could signal willingness to negotiate, knowing the 37% premium nearly gets investors back to MON's post-financial crisis high and more than makes up for the drop over the past year as slumping crop prices forced farmers to cut spending.
Mon, May 23, 1:56 AM
- Bayer (OTCPK:BAYRY) has confirmed its offer to acquire Monsanto (NYSE:MON) with a $122 per share all-cash bid that values the U.S. agribusiness at $62B.
- The German drug and chemicals giant anticipates annual earnings contributions from synergies of around $1.5B after three years, and said it would finance the deal through a combination of debt and equity,.
- A tie-up is also expected to provide Bayer shareholders with accretion to core EPS by a mid-single-digit percentage in the first full year after closing and a double-digit percentage thereafter.
Mon, May 23, 12:38 AM
- Bayer (OTCPK:BAYRY) is wrapping up a cash offer of more than $46B for Monsanto (NYSE:MON) that it could reveal as soon as Monday morning, the Financial Times reports.
- Any offer would be expected at a premium to Monsanto's market value as last week ended. After reports of Bayer's overtures came Wednesday night, Monsanto gained 4.5% to a market cap just under $45M.
- Both companies confirmed the proposal last week but neither provided details. But those are likely coming now that shareholders are questioning what kind of capital raise Bayer will need to fund such a deal. Some Bayer shareholders are upset at the offer.
- Banks are lining up to help Bayer, though, the FT says.
- Now read Monsanto: One Reason For The Acquisition And Five Against It »
Sun, May 22, 8:41 AM
- Now that Bayer's (OTCPK:BAYRY) bid for Monsanto (NYSE:MON) is out of the bag, attention has turned to how much the German company will need to pay for the seed giant.
- So far, neither side has disclosed the terms or structure of the takeover, but estimates compiled by Bloomberg range from $120-$150 a share, or a total value of up to $63B.
- Other concerns include how Bayer will finance the deal, keep its investment-grade rating, and stay on top of its non-agricultural businesses.
Fri, May 20, 11:35 AM
- A top investor in Bayer (OTCPK:BAYRY +0.8%) says he is "furious" at the company's refusal to engage with him over its recent takeover bid for Monsanto (MON +1.3%).
- John Bennett, fund manager at Henderson Global Investors, Bayer's 15th biggest investor by company, says Bayer CEO Werner Baumann had only been on the job for weeks and had presided over an "immediate destruction" of shareholder value.
- Yesterday, UBS Global Asset Management said it was "deeply concerned" about a deal, saying it would prefer Bayer and MON agree to a joint venture or a no-premium merger.
- Some farmers and lawmakers say a deal could be one too many for an agrochemical and seed market where prices have risen and innovation has suffered.
- And add Citi’s P.J. Juvekar to the analysts who believes the acquisition is unlikely to occur, given potential synergies, divestitures needed, regulatory concerns and more.
- Now read Bayer buyout of Monsanto "relatively unlikely," analyst says
Thu, May 19, 8:24 AM
- Bayer (OTCPK:BAYRY) investor UBS Global Asset Management says it is "deeply concerned" about the takeover approach to Monsanto (NYSE:MON), saying it would prefer the companies agree to a joint venture or a no-premium merger.
- A UBS fund manager says he was surprised by the takeover approach given the management team was fairly new and settling in, and a recent acquisition in consumer health had yet to be integrated successfully.
- While no takeover price has been mentioned by either company, Bernstein estimates €41.9B ($47B) plus €6.7B in assumed debt, and says Bayer might need a €27B share issue to help fund a deal; Citi analysts have said Bayer may need to pay 14x-16x MON's core earnings, implying a takeover price including debt of €57B-€65B.
- MON +7.6% premarket.
Thu, May 19, 6:40 AM
- In a statement, Bayer (OTCPK:BAYRY) says it met recently with executives of Monsanto (NYSE:MON) to discuss an acquisition of Monsanto. Further information will be provided when appropriate.
- Monsanto said in a statement that it received a non-binding proposal from Bayer for a potential acquisition. The board is currently reviewing the proposal.
Wed, May 18, 9:52 PM
- Bayer (OTCPK:BAYRY) has made takeover overtures to Monsanto (NYSE:MON), The Wall Street Journal reports.
- Details were unclear, but a tie-up would result in the world's largest seed and crop-chemical company, with $67B in annual sales.
- Earlier, Monsanto's president and chief operating officer, Brett Begemann, called chatter about a takeover by Bayer or BASF "wild speculation because there's nothing there."
- Updated: A Monsanto statement says it's received an "unsolicited, non-binding proposal" from Bayer about a potential acquisition, and that the board is reviewing it in consultation with financial and legal advisers and won't comment otherwise.
- Now read Monsanto: Takeover Unlikely »
Wed, May 18, 2:35 PM
- Monsanto (MON -0.6%) slips as President and COO Brett Begemann says talk of a takeover by Bayer (OTCPK:BAYZF, OTCPK:BAYRY) or BASF (OTCQX:BASFY) is "wild speculation," and MON is staying focused on its own strategy.
- "It's all wild speculation because there’s nothing there," the COO tells Reuters at a BMO investor conference in New York.
- MON also says it expects farmers to plant its Xtend soybeans on more than 15M acres in North America next year, and believes the EU will approve imports by late summer or early fall.
- Now read Monsanto suspends new soybean technologies in Argentina
Thu, May 12, 3:37 PM
- Monsanto (MON +8.5%) remains sharply higher though off highs of the day, following headlines that Bayer (OTCPK:BAYRY -4.1%) and BASF (OTCQX:BASFY -1.7%) are considering a possible acquisition of the company.
- Financial Times reports that MON is interested in forming some sort of combination with the agrochemical businesses of either of the two companies but opposes any deal that would turn it into a division of a German company.
- Piper Jaffray analysts say the interest in acquiring MON is mere speculation, seeing a potential joint venture as a more likely outcome as "we believe Monsanto remains committed to building a chemistry business."
- J.P. Morgan believes Bayer would need to raise equity given the size of the deal, and thinks Bayer investors likely would be only lukewarm around the potential deal given limited accretion and investor desire for Bayer to strength its pharma pipeline following recent setbacks.
- Analysts say a MON takeover likely would draw intense scrutiny from global regulators already confronting an unprecedented wave of consolidation in the crop chemicals industry involving the likes of Dow Chemical (DOW +0.8%), DuPont (DD +0.2%) and Syngenta (SYT +0.4%).
- Now read Seed war sparked: Bayer and BASF to battle over Monsanto?
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