Syngenta
may seek partners, JVs after product review: chairman in
paper
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[August 29, 2015]
ZURICH (Reuters) - Syngenta AG
<SYNN.VX> may seek partners to help improve its product lineup after a
thorough review in the wake of a rebuffed takeover approach from
Monsanto Co <MON.N>, the agrichemicals group's chairman told a Swiss
newspaper.
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Syngenta's board is under pressure from shareholders to show how it
plans to generate value after turning its back on Monsanto's $47
billion cash-and-share offer, which it said undervalued the company
and had too great an execution risk.
In an interview with Finanz und Wirtschaft, Michel Demare said it
was too early to discuss what steps Syngenta planned to boost its
results.
But he added: "We will subject our product portfolio to a total
review, especially on the seed side. Then we will see if there are
appropriate transactions to improve ourselves, perhaps with
partnerships and joint ventures."
Asked about short-term steps it could take, he said: "Some of these
things can be done in the short term. But what we do not want is to
improve earnings in the short term at the expense of the future. We
must remain responsible."
Demare said he had no concerns about activist shareholders and had
no immediate plans to try to forge a group of core investors from
the company's fragmented investor base.
"But if we made a major acquisition, it would be possible for
example to take a major investor on board who co-financed the
transaction by purchasing Syngenta shares," he added.
Demare said he took six calls from Monsanto boss Hugh Grant in the
first two weeks of August alone and had no idea what Grant planned
next.
Some Syngenta investors have expressed dismay that the company did
not at least open talks with Monsanto. "For me it is clear that the
chairman did not behave as many shareholders would have wished," FuW
quoted Artisan Partners fund manager Richard Logan as saying.
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Demare acknowledged Syngenta had to "explain ourselves, regain trust
and deliver results" but also dismissed as "illusion" the offer
price of 449 Swiss francs and then 470 francs per share that
Monsanto said it had proposed. He noted the 18 months it would have
taken to wrap up any deal.
Syngenta shares fell 18 percent on news Monsanto was abandoning its
approach and closed on Friday at 323.70 francs.
Demare noted the stock was slightly above the level it was when
Monsanto emerged as a suitor, while rivals' shares were down by as
much as a fifth.
He said Syngenta's cost-cutting program was ahead of plan but could
be expanded should it find more room to cut.
(Reporting by Michael Shields; editing by John Stonestreet)
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