Monsanto Company (NYSE: MON)
Monsanto has had an incredibly strong time in the market over the past few trading sessions, and the gains continue today. The gains we’ve seen recently revolve around one of the favorite topics among investors, a possible acquisition. Today, we’ll talk about the possible buy out, what we’re seeing in the market, and what we can expect to see from MON moving forward.
Bayer Really Wants MON
As mentioned above, Monsanto has had a great time in the market through the past few trading sessions. This is the result of an acquisition offer that has been increased. Bayer has been trying to buy the company for some time now. Previously, they offered $122 per share for a total buyout value of $62 billion. Nonetheless, MON declined the offer. The offer didn’t offer the premium the company wanted to see.
After the offer was declined, the story seemed to disappear. That is, until Bayer proved just how badly they want to acquire the company. The company recently offered an increased takeover bid, increasing their bid from $122 per share to $125 per share. In a statement, Bayer said that they believe that this offer fully captures the intrinsic value of MON.
What We’re Seeing In The Market Today
There are few things that have to potential to get investors quite as excited as news of possible mergers and acquisitions. As a result, we’ve seen strong gains in the value of the stock over the past few trading sessions. Today, Monsanto continues to climb in the market. Currently (3:39), the stock is trading at $106.36 per share after a gain of $2.91 per share or 2.81% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an incredibly bullish opinion of what we can expect to see from MON stock. First and foremost, let’s discuss the takeover bid. It is clear at this point that Bayer isn’t likely to let up. However, it’s important to consider the premium. The new offer is still well under the 30% top-of-the-line premium that many would expect from a buyout like this. Nonetheless, it is a great offer. With that said, the buyout plans are up in the air. No one really knows if MON is going to make the decision to sell. With that said, if I had to bet on a yay or nay, I would say nay. While the offer is improving, I don’t believe that it captures the true value of Monsanto. So, taking the offer, in my opinion, would be an injustice to shareholders.
At the end of the day, when we talk about MON, we’re talking about a company that has quite a bit going for it. The company is in the chemicals and biotechnology in agriculture industries. These industries are two that are doing very well at the moment. Not to mention, we’re not talking about the little guy here. Monsanto has built its name as a leader in the industry. They have a long list of products that sell well. Not to mention, they are incredibly profitable. Add all of this together with a great management team and a clear plan for growth moving forward, and we have a stock that’s likely to head up moving forward. All in all, I’m expecting to see further gains regardless of the possible acquisition.
What Do You Think?
Where do you think MON is headed moving forward and why? Join the discussion in the comments below!