Exclusive: Monsanto in talks with Bayer over confidentiality pact - source

Tue Jul 19, 2016 12:06am EDT
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By Greg Roumeliotis and Michael Flaherty

(Reuters) - U.S. seeds company Monsanto Co is negotiating the terms of a confidentiality agreement with Bayer AG that would allow extensive due diligence, after the German drug and crop chemical group raised its acquisition bid to more than $64 billion, a source familiar with the matter said on Monday.

While there is no certainty the latest talks between the two companies will result in a confidentiality pact, let alone in any deal, the move indicates that Bayer's latest offer may at least help the negotiations make progress.

Bayer said last week it had sweetened its acquisition offer for Monsanto to $125 per share in cash from $122 per share and offered it a $1.5 billion reverse antitrust breakup fee.

Monsanto would still require Bayer to raise its offer further in order to agree to a sale, the source said. The source asked not to be identified because the negotiations are confidential. Bayer and Monsanto declined to comment.

Monsanto shares closed 2.9 percent higher at $106.44 on Monday on the news. Bayer shares had previously ended trading in Frankfurt down 1.1 percent at 92.90 euros ($102.85).

Access to confidential information has been a major sticking point in Bayer's negotiations with Monsanto ever since the Leverkusen, Germany-based company offered to acquire its smaller St. Louis, Missouri-based peer in May.

Monsanto Chief Executive Hugh Grant said last month that his company was in talks with Bayer and other companies in its sector about "alternative strategic options." He did not name the other companies, but Reuters has previously reported that Monsanto had discussed a business combination with BASF SE.

Bayer argued last week that it had comprehensively addressed Monsanto's questions about financing and regulatory matters and said it was prepared to make certain commitments to regulators, if required, to complete a deal.   Continued...

The logo of Bayer AG is pictured at the Bayer Healthcare subgroup production plant in Wuppertal February 24, 2014.  REUTERS/Ina Fassbender/File Photo