Bayer raises bid for Monsanto

Bayer has raised its offer for Monsanto in a bid that values shares of the U.S. company at $54.7 billion, a 2.5 percent rise that came after being rebuffed in its initial efforts to combine operations and become the world's biggest supplier of farm chemicals and seeds.

The proposed price was increased to $125 a share in cash, and Leverkusen, Germany-based Bayer also offered an 'antitrust break fee” of $1.5 billion, according to a statement Thursday. That's up from the initial terms of $122 apiece and represents a 40 percent premium over Monsanto's closing price on May 9.

Monsanto, the world's largest seed supplier, said Thursday its board of directors will review the increased offer.

The new bid came amid renewed talks between the U.S. seeds maker and Germany's BASF about a possible combination.

'From a Monsanto perspective, the BASF combination is better because they would be the ones in the driver's seat,” said Jason Dahl, a New York-based senior portfolio manager at Victory Capital Management Inc. 'In a Bayer takeover, the U.S. would lose one of its great assets. I hate to see the company fall in the hands of someone else.”

Bayer said it verbally raised its offer on July 1, and followed up with a proposal sent to Monsanto on July 9. The initial bid valued Monsanto and its debt at $62 billion, and was rejected on May 24 as 'incomplete and financially inadequate.”