Wed, Aug. 26, 4:58 PM
- Monsanto (NYSE:MON) finished +8.5% today after dropping its bid for Syngenta, and Citigroup maintains its Buy rating on the stock as management "showed discipline" by ending the process.
- With the offer now off the table, MON said it plans to resume repurchasing its own shares, and Citi says the commitment to return capital to shareholders could alleviate fears that MON will quickly undertake another major transaction; MON has ~$4B remaining on its two-year, $10B share repurchase program announced in mid-2014.
- Although the macro ag backdrop is challenging with farm incomes falling and low grain prices, Citi says MON remains "well positioned as the strongest seed company with the best R&D pipeline in the industry."
Wed, Aug. 26, 12:40 PM
- Syngenta (SYT -11.5%) shareholders are calling on the board to clarify how it intends to make up billions of dollars of lost shareholder value after Monsanto (MON +8.6%) abandoned its takeover bid.
- "We need the board and the management to explain their Plan B," says Pauline McPherson, co-fund manager of Kames Capital's global equity fund, which holds SYT shares.
- Other investors question why SYT's management were so reluctant to open their books
- MON's $46B bid is the largest pulled deal since Valeant Pharma's November 2014 withdrawal of its $54B offer for Allergan.
Wed, Aug. 26, 10:52 AM
- Monsanto (MON +6.5%) says it is no longer pursuing a combination with Syngenta (SYT -15%) after a new bid was rebuffed; shares resume trading after a halt.
- MON says SYT has told it that the company's enhanced proposal did not meet expectations, thus it will continue to focus on growth opportunities built on its existing core business.
- MON says its latest proposal increased the cash component of the proposed takeover to 245 Swiss francs/share and maintained the same number of shares as in its April proposal; the revised proposal translated to a value of 470 Swiss francs/share.
Tue, Aug. 25, 2:14 PM
- Monsanto (MON -2.8%) and Syngenta (SYT -3.1%) are sharply lower after CNBC's David Faber reported earlier about growing opposition among MON shareholders to its continued approach for SYT.
- Reports yesterday indicated that MON had increased its offer for SYT to 470 Swiss francs, up from 449 earlier, and upped its break-up fee by $1B to $3B.
- Faber says he is "hearing significant opposition" to the deal from some major MON shareholders and expects them to relay their concerns to the company soon.
Mon, Aug. 24, 12:23 PM
- Syngenta (SYT +9.3%) spikes higher after Bloomberg reports that Monsanto (MON -1.2%) has made an increased takeover offer to the Swiss company in the hopes of enticing it the negotiating table after MON's earlier approach was rejected.
- The latest offer values SYT at ~470 Swiss francs/share ($503) in cash and stock, compared with the 449 francs MON offered earlier this year, according to the report.
- MON's proposal is said to contain a higher proportion of cash than the prior bid, which envisioned a split of 45% cash to 55% shares, and its proposed fee to be paid if antitrust regulators block the deal has increased to $3B from the previously promised $2B.
Wed, Jul. 15, 11:44 AM
- A leading Syngenta (SYT +2.9%) shareholder is criticizing the company's board for excluding all but a very small group of shareholders from talks that could determine the fate of a $45B takeover bid by Monsanto (MON -0.1%), Reuters reports.
- Henderson Global Investors says SYT had relied on a YouTube video to communicate with other investors, a "short-sighted" strategy that likely will prove counter-productive in SYT's attempt to thwart its U.S. suitor.
- "The most recent proposal by Monsanto is credible and deserves serious consideration," a letter from the SYT's 20th biggest shareholder reportedly says.
Tue, Jul. 14, 5:02 PM
- John Paulson's hedge fund has taken a significant stake in Syngenta (NYSE:SYT) in a sign of support for Monsanto's (NYSE:MON) $45B takeover offer, Bloomberg reports.
- The stake, which has not been publicly disclosed, reportedly may put Paulson & Co. among the 20 largest shareholders in SYT, but it is not clear if Paulson will go public with his stake and his support of a merger.
- Paulson has a reputation for using his hedge fund to take large positions in companies engaged in ongoing merger discussions and voicing his support for a transaction.
- SYT +1.7% AH.
Fri, Jul. 10, 9:50 AM
- Monsanto (MON +1.2%) likely will refrain from making another move on Syngenta (SYT +4.1%) until after July 23 when SYT reports H1 results, Bloomberg reports, hoping for a weak quarter that would provide MON with fresh ammunition for its buyout case.
- A strong set of numbers would help support SYT’s dismissal of the deal, which it has called simplistic and doomed to fail with regulators, but MON would look to highlight SYT’s under-performance over recent years.
- SYT’s results likely will suffer from the challenging market affecting other seeds and crop-chemical makers.
Wed, Jun. 24, 3:49 PM
- Monsanto (MON -5.1%) is sharply lower after issuing a cautious outlook for the next quarter, as well as 2016 and beyond, and perhaps on investor concerns about its new offer to Syngenta, which now includes a new $2B reverse break-up fee to be paid if the companies fail to obtain needed regulatory approvals.
- "Expectations are being tempered," Edward Jones analyst Matt Arnold says, noting that MON's FQ3 earnings gain was driven by a one-time licensing payment from Scotts Miracle Gro, which sells MON's signature Roundup weed killer to consumers.
- Monsanto continues to grapple with a downturn in the agricultural economy as farmers in tighten spending after two consecutive bumper harvests hiked global supplies and weighed on corn and soybean prices; “We expect many of these headwinds to continue into fiscal 2016," MON President Brett Begemann said in today's earnings call.
- MON is “acknowledging that this is an agriculture bear market that is going to continue,” says Monness Crespi analyst Chris Shaw.
- On Syngenta, CEO Hugh Grant implored investors to appeal to its board to engage in deal talks, but the window for a deal “is measured in months, not years.”
Wed, Jun. 3, 12:55 PM
- BASF (OTCQX:BASFY) is considering a potential offer for Syngenta (SYT +4.4%), and is speaking to investment bankers about the possibility of an offer, according to a Reuters report.
- SYT so far has spurned a $45B takeover offer from Monsanto (MON -0.3%), but lawyers representing the two companies reportedly have met to discuss whether regulatory obstacles can be overcome.
Wed, May 20, 10:16 AM
- Monsanto (MON -0.9%) elaborates on its proposed acquisition of Syngenta (SYT +2.3%), saying it is committed to divesting SYT's entire seed business to win regulatory approval for a merger.
- The deal also would include the sale of some overlapping chemical operations, MON says in a statement ahead of an investor presentation by COO Brett Begemann.
- MON says the combination of the two companies would create substantial cost savings, enhance research and development, and offer farmers a more diverse range of products and services.
- For its part, SYT reiterates that MON's proposal "fundamentally undervalues" its prospects and pipeline, and that MON's latest assurances were already considered and rejected by SYT's board.
Thu, May 14, 3:05 PM
- Monsanto (MON +1.7%) is trying to line up buyers for assets worth up to $8B to appease regulators before making a new takeover approach for Syngenta (SYT +1.7%), possibly within three weeks, Reuters reports, citing industry sources.
- MON reportedly will tap Germany's BASF (OTCQX:BASFY, OTCPK:BFFAF), an existing joint venture partner, as it seeks a buyer for SYT's U.S. seeds business, which cannot be part of its proposed takeover.
- SYT's seeds business could be worth $6B-$8B, and likely would need to be sold because authorities are expected to block MON from adding to its dominance of the U.S. soy and corn seeds market.
Fri, May 8, 2:53 PM
- Major investors in Syngenta (SYT +11.7%) are confident a deal with Monsanto (MON +1.6%) will happen if the U.S. company raises its initial $45B bid by at least 10%, Reuters reports.
- "A full cash offer at 450 francs or a 50/50 stock and cash offer at 500 francs would suit us at first sight, [but] we will deepen our analysis in the coming days," a top SYT investor reportedly says.
- Despite having some unique assets, SYT's management had "over-promised and under-delivered," so a deal would be welcome as long as the price got closer to 500 Swiss francs, according to another investor.
- The two biggest SYT investors are asset managers BlackRock and Capital Research Global Investors, both with a combined stake across their various funds of ~5%; at a fund level, the biggest investor is the Harbor International Fund, which holds a 2.7% stake.
Fri, May 8, 12:25 PM
- Monsanto’s (MON +2.3%) rejected $45B bid for Syngenta (SYT +9.7%) forces the suitor to ask itself the same hard question as disappointed shareholders of the target company: Is Syngenta worth more?
- Deutsche Bank's Virginie Boucher-Ferte believes the deal likely will get done but at a higher price and/or a higher cash component in order to better take into account the execution risk.
- Even at 500 Swiss francs/share vs. the current 449 Swiss francs/share offer, the analyst thinks the deal would be earnings accretive for MON due to the significant synergy potential, low interest rates, and the low Swiss corporate tax rate which would benefit MON.
- Regulatory risks are "not insurmountable," Boucher-Ferte says, noting SYT's relatively small 8% global market share in seeds.
Fri, May 8, 10:15 AM
- Monsanto (MON +3.8%) confirms it has offered a takeover deal for Syngenta (SYT +12.1%) which it believes would deliver "significant value to shareholders of both companies" and generate "substantial synergies."
- Monsanto says it made a private proposal to SYT's board to acquire the company for 449 Swiss francs per share, including ~45% cash.
- MON also says it is confident in its ability to obtain all necessary regulatory approvals for a takeover.
- SYT rejected MON's offer in a statement that said it undervalues the company.
Thu, May 7, 4:15 PM
- Syngenta (SYT +6.1%) spiked into the close following a Reuters report that the company is working with Goldman Sachs to assess the merits of a potential takeover deal by Monsanto (MON +2.4%), which is said to have hired Morgan Stanley as its adviser.
- MON long has been interested in SYT and the potential to base itself in Switzerland and benefit from lower taxes, but with the U.S. attempting to clamp down on such tax inversion deals, MON may have to buy SYT in a cash rather than stock transaction and would be unable to redomicile in Switzerland - a tall order that could require the need of a partner before launching a takeover bid that could cost as much as $40B.
- MON approached SYT last year about some sort of combination, and rumors of talks between the two have picked up in the past week.
MON vs. ETF Alternatives
Monsanto Co is a provider of agricultural products for farmers. The Company offers corn, soybean, cotton, wheat, canola, sorghum and sugar cane seeds. Its segments are Seeds and Genomics and Agricultural Productivity.
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