Syngenta spars with suitor Monsanto over takeover

[July 23, 2015]   By Ludwig Burger

ZURICH (Reuters) - Syngenta <SYNN.VX> and unwanted suitor Monsanto squabbled over an earnings report from the Swiss pesticides maker on Thursday, with both sides claiming it strengthened their case in a $45 billion takeover battle.

Monsanto wants to combine its world-leading seeds business with Syngenta's own seeds and pesticides. Syngenta has rejected the proposal and refused to open its books, despite the offer of a $2 billion cash payment should the transaction fail to win regulatory approval.

Both sides found fodder in the first half earnings report to press their argument.

Adjusted earnings per share from Syngenta fell 6 percent and sales fell 10 percent in the first six months of the year but still exceeded average estimates in a Reuters poll. Adjusted for currency swings, sales rose 3 percent.

"Syngenta in a strong position for negotiations on a combination with any other player in the industry. We consequently confirm our "Outperform" rating," analyst Bernd Pomrehn of MainFirst bank wrote in a note.

Syngenta said it did not need to do a deal.

"Syngenta is not the one with the problem, Monsanto is the one with the problem that it is trying to solve on the back of our crop protection products," Chief Executive Michael Mack told Reuters in a telephone interview.

"I completely reject any suggestion that the company is incomplete in any way."

Syngenta shares fell 1.4 percent to 397.90 francs by 0840 GMT, a discount to the price of the Monsanto approach.

"Syngenta's earnings announcement confirms it still does not have a long-term vision or plan that would create the same value as Monsanto's very attractive 449 Swiss franc [per share] proposal," Monsanto Chairman Hugh Grant said in an emailed statement.

"Monsanto remains ready to discuss with Syngenta a combination that would provide highly attractive returns to shareholders and would represent a transformational opportunity for global agriculture to meet the needs of farmers and broader society. The ball remains in their court."

Last week, Monsanto said it was far from going hostile for Syngenta, saying the U.S. firm was focused on trying to secure a negotiated deal.

Syngenta is under pressure from shareholders to explain its stance.

Hedge fund Paulson & Co has taken a stake in Syngenta, sources have said, and one of its top 20 investors, Henderson, criticized the company for limiting communication with all but the biggest investors to a YouTube video.

Mack claimed that Syngenta's management was supported in rejecting Monsanto's bid by a broad base of important investors.

"We did talk to quite a few more than our top five shareholders, some of which are also shareholders of Monsanto... They are absolutely supportive of what we are embarking on here," he told Reuters.

(Reporting by Ludwig Burger; Writing by Georgina Prodhan; Editing by Biju Dwarakanath and Keith Weir)

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