Syngenta Receives Second Letter From Monsanto; Reiterates Prior Rejection

(RTTNews) - Swiss crop chemicals firm Syngenta AG (SYT) Monday said that on June 6, it received a second letter from Monsanto Co. (MON) which essentially repeated the first proposal of April 18.

The only change by Monsanto is to add a wholly inadequate reverse regulatory break fee, Syngenta said.

According to Syngenta, Monsanto's second letter represents the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks and same issues associated with dual headquarters' moves.

"As such, we have reiterated our prior rejection of Monsanto's proposal," the firm said in a letter to shareholders written by its Chairman Michel Demaré and Chief Executive Officer Mike Mack.

Syngenta noted that if a transaction were to be announced and not consummated, there would be significant harm and value destruction for the company and its shareholders, which requires a careful assessment of all risks and a clear path to closing.

This is in no way adequately addressed by a paltry reverse regulatory break fee relative to such fees seen in transactions with comparable levels of regulatory risk, Syngenta said.

Further, Syngenta's Board, in conjunction with its legal advisors, does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package of horizontal divestitures, which is Monsanto's proposed approach.

The outside counsel of Syngenta and Monsanto had met on three occasions, subsequent to the rejection letter earlier, to discuss the regulatory challenges.

These meetings reinforced Syngenta's assessment of the regulatory risks and Monsanto has made no attempt to seriously address these concerns. Monsanto continues to gloss over these fundamental transaction risks, Syngenta said.

Monsanto had said last month that it had made a private proposal to Syngenta's Board of Directors to acquire Syngenta for 449.00 Swiss francs per share, and that it was confident in its ability to obtain all necessary regulatory approvals.