Syngenta Open to ‘Serious’ Bid as It Lines Up Investor Talks

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Syngenta AG Chairman Michel Demare said the Swiss agrochemicals maker is willing to entertain a serious offer, calling Monsanto Co.’s current bid simplistic and unlikely to meet the demands from competition authorities.

“A serious proposal to buy Syngenta has to be made at full and fair value, has to recognize for shareholders the inherent combination benefits and it has to provide a high degree of certainty that the transaction will be closed,” Demare said today in a video posted on the company’s website.

Monsanto is now at an impasse in its pursuit of Syngenta more than six weeks after having its initial $45 billion bid rejected. A demand for access to Syngenta’s books, before committing to any increased bid, was turned down and Monsanto has appealed directly to shareholders to put pressure on Chief Executive Mike Mack to engage in negotiations.

After publishing four pages of questions and answers on why Syngenta is defiant in its rebuttal of Monsanto, it’s now the turn of Demare to talk to shareholders. Executives will discuss the situation with Syngenta’s top shareholders in the coming days to get their feedback.

Shares of the Basel-based company, which is scheduled to report earnings on July 23, climbed 0.4 percent to 401.8 francs as of 9:10 a.m. Monsanto will report quarterly earnings tomorrow.

Monsanto’s Turn

“It’s up to Monsanto management to forge a path forward,” Citigroup’s analysts said in a note today. “Syngenta’s antitrust concerns are not without merit as combining the largest seed and largest agrochemical companies may be entering uncharted waters. Further, an extended regulatory review by numerous countries is likely.”

Monsanto, based in St. Louis, has pledged to sell Syngenta’s seed and genetically engineered traits as well as any overlapping crop chemicals to win regulatory approval. Chemicals that would be sold include Syngenta’s glyphosate and acetochlor herbicides.

The board was unanimous in concluding that Monsanto’s proposal “signficantly” undervalues Syngenta’s prospects, Demare said.

Monsanto’s offer came at a time when Syngenta’s share price was depressed by external events such as weakness in emerging market currencies and low crop prices. It’s the latest attempt - - after three endeavors in four years -- to buy Syngenta on the cheap, Demare said.

Monsanto has been silent on synergies so far, Demare said, of which shareholders would need to have their fair share.

“Our external legal counsel has met with its Monsanto counterparts a number of times to really be open and try to understand where they were coming from, from an antitrust perspective,” Demare said. “These meetings in fact have raised even more concerns because we could see that Monsanto was taking a very simplistic approach to the problem.”