Monsanto to reject $62 billion Bayer bid, seek higher price: Sources

Monsanto Co will reject Bayer AG`s $62 billion acquisition bid and seek a higher price, two people familiar with the matter said on Tuesday.

While Monsanto 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, the people said. They asked not to be identified because the deliberations are confidential. 

The German drugs and crop chemicals group said on Monday it offered Monsanto $122 per share. It was not clear what price Monsanto would be willing to sell for.  Monsanto and Bayer representatives did not immediately respond to requests for comment.

Monsanto had disclosed last week that Bayer had made an unsolicited takeover offer for the group, triggering an investor backlash in which one of the German pesticides and drugs company's major shareholders called the move "arrogant empire-building".

Bayer's offer values Monsanto at 15.8 times its 12-month earnings before interest, tax, depreciation and amortisation (EBITDA) as of February 29.

Bayer said it planned to finance the deal with a combination of debt and equity, which would include a rights offering.

It expects annual earnings contributions from synergies of around $1.5 billion (nearly Rs 9,979.13 crore) after three years, plus additional future benefits from integrated offerings.