WASHINGTON, May 24, 2016 - Monsanto’s board of directors has unanimously rejected a $62 billion buyout bid from Bayer AG, calling it “incomplete and financially inadequate.”

But the St. Louis-based seed and crop protection company also left the door open for “continued and constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners can be achieved.”

“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” said Hugh Grant, Monsanto chairman and CEO. “However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition.”

The board of directors “has not set a timeline for further discussions and Monsanto does not intend to make further comment at this time,” the company said in its brief statement.

Bayer responded quickly with its own statement: "Bayer announced today that it looks forward to engaging in constructive discussions with Monsanto regarding the proposed transaction. Bayer reiterated that its $122 per-share all-cash proposal provides full and certain value for Monsanto shareholders.

“We are pleased that Monsanto’s Board shares our belief in the substantial benefits an integrated strategy could provide to growers and broader society,” said Werner Baumann, CEO of Bayer AG. “We are confident that we can address any potential financing or regulatory matters related to the transaction. Bayer remains committed to working together to complete this mutually compelling transaction.”

Monsanto’s statement can be interpreted in a couple of ways, said Jonas Oxgaard, a senior analyst who covers the U.S. chemicals industry for Bernstein Research in New York City.

It could be the company’s way of driving up the price of the offer, which he said was obviously too low at $122 per share. Or, he said, Monsanto would rather stick to its strategic vision, which has resulted in its share price going from the teens to comfortably above $100 in the past 15 years.

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“I honestly don’t think Monsanto wants to be sold,” Oxgaard said. “I think they are proud of what they’ve achieved.”

“They stuck to their vision – that genetically modified seeds were going to revolutionize farming and earn outsized returns,” he said, adding that “to abandon that at the first downturn … would rankle the management team.”

Monsanto management “talk about 2025 the way other companies talk about 2017,” he said. The “next wave” for the company includes extensive use of biologicals and precision agriculture, he said.

All that being said, Oxgaard said, “as with anything else in life, there’s a price.”

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