Survey: Monsanto Investors Love Deal, Bayer Investors Hate It

Following the Monsanto Company (NYSE: MON) rejection of the acquisition bid from Bayer AG (ADR) (OTC: BAYRY), Bernstein conducted an investor survey to gain a better understanding of the current situation.

Bernstein’s Jonas Oxgaard maintains an Underperform rating and price target of $80 on Monsanto, with an Outperform rating and price target of €113 on Bayer.

With 168 respondents completing the survey, Oxgaard mentioned that the results for each company were “diametrically opposite.”

What Bayer Investors Think

The analyst noted Bayer investors were very resistant to the deal and none of them were pleased with either management or the strategy.

“Bayer investors are very critical of the transaction and have some sharp words about the standalone company as well,” Oxgaard stated, with only 7 percent of Bayer investors believing that the Monsanto acquisition was strategically right.

Regarding the acquisition price, 56 percent of Bayer investors felt that the offered price of $122 was too high.

While there were mixed views regarding where the investors expected Bayer to trade in 2019, “the average is about €100/share regardless of investor affiliation,” according to the Bernstein report.

What Monsanto Investors Think

“Monsanto's investors see a sale of the company as the best way to create value, with rather constructive/neutral input for their management,” Oxgaard said.

The analyst pointed out that 84 percent of Monsanto shareholders were in favor of the bid being accepted, while none of them wanted the company to continue as a standalone.

On average, Monsanto investors believed that a price of $137 was fair, with 70 percent of the investors putting the completion of the acquisition as the top priority for Monsanto.