Monsanto Shareholders to Vote on Bayer's Acquisition

December 5, 2016 02:30 PM
Monsanto & Bayer

On December 13, 2016, shareholders decide the fate of Bayer’s proposed acquisition of Monsanto. Institutional Shareholder Services Inc. (ISS) and Glass, Lewis and Co., LLC, proxy advisory firms, both recommend shareowners vote in favor of the proposal.

The current agreement says shareowners will receive $128 per share in cash upon closing the merger. In addition, the merger agreement says Bayer will provide a $2 billion reverse termination fee to mitigate regulatory risk to Monsanto and shareholders, Glass, Lewis and Co., LLC says in its recommendation.

“The offer represents a 41.7% premium to the unaffected price, a 29.8% premium to the three-year media EV/NTM EBITDA multiple and a 22.7% premium to the three-year median NTM P/E multiple,” ISS notes.

To adopt the merger agreement, companies must have a majority of affirmative vote from shareholders of outstanding shares of common stock able to vote at the special December meeting. Failure to vote or abstaining from voting effectively acts as a vote “against” the proposal to adopt the merger agreement.

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