Despite a promised US$1.5 billion reverse break-up fee, Monsanto has deemed Bayer's revised acquisition bid as "insufficient to ensure deal certainty".

Last week, German seed and crop protection group Bayer increased its offer for the U.S. company by 2.5% to US$125 per share.

"Monsanto Company (NYSE: MON) today announced that its Board of Directors unanimously views Bayer AG’s revised proposal as financially inadequate and insufficient to ensure deal certainty," Monsanto said in an announcement today.

"Monsanto remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction that the Board believes is in the best interest of Monsanto shareowners can be realized.

"There is no assurance that any transaction will be entered into or consummated, or on what terms."

In a release, Bayer expressed disappointment over the decision, given the revised offer represented a 40% premium over Monsanto's share price on May 9 when the first offer was made.

"The revised all-cash offer is a compelling opportunity and represents immediate and certain value for Monsanto shareholders amid recent weak business performance and Monsanto's reduced mid-term outlook," Bayer said.

"Bayer reaffirmed that its offer would not be subject to a financing condition. In addition, Bayer has offered a USD 1.5 billion reverse antitrust break fee, reaffirming its confidence in a successful closing.

"Bayer is looking forward to continued dialogue with Monsanto under an appropriate confidentiality agreement allowing access to additional information."

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