German-based Bayer's sweetened $64bn offer for Monsanto is still not sweet enough, the US seeds giant said, although adding that it was "open" to further talks on a deal.
Monsanto, the world's biggest seeds group, said that its board had "unanimously" rejected Bayer's $125-per-share bid as "financially inadequate and insufficient to ensure deal certainty".
Bayer upgraded the offer, the biggest all-cash bid on record, from a previous proposal of $122 per share.
However, the Missouri-based company added that it was "open to continued and constructive conversations" with Bayer – and with "other parties" – to see whether a deal deemed "in the best interest of Monsanto shareowners can be realised".
Bayer, in reply, said that it was "disappointed" that Monsanto directors had rejected what it termed a "compelling opportunity".
The German group also, after a series of cuts by Monsanto to its profits hopes, said that the deal "represents immediate and certain value for Monsanto shareholders amid recent weak business performance and Monsanto's reduced mid-term outlook".
Bayer added that was "looking forward to continued dialogue" with Monsanto, which may be allowed "access to additional information".
In Frankfurt, Bayer share closed down 1.2% at E91.78, while Monsanto stock ended up 0.5% at $106.87 in New York.
Monsanto's comments come five days after the group said that it was in talks with its advisers over Bayer's revised offer, which also included a guarantee of a $1.5bn fee to the US group should a deal be scuppered by anti-trust concerns.
Indeed, Bayer said on Thursday – confirming it had held weeks of "private talks" with Monsanto - that it was "confident in its ability to obtain all necessary regulatory approvals" for a deal, and "in a timely manner", adding that financing for the takeover had been secured too.
Werner Baumann, Bayer's newly-appointed chief executive, said that "we are convinced that this transaction is the best opportunity available to provide Monsanto shareholders with highly attractive, immediate and certain value".
However, Monsanto, which itself failed in a bid for Swiss-based rival Syngenta last year, has confirmed that it has held talks with companies other than Bayer over "strategic options".
BASF, Bayer's German-based peer, is believed to have been among companies Monsanto has talked too.
Bayer, meanwhile, has faced questions from some of its shareholders over a Monsanto deal, with Henderson Global Investors, which has a 0.7% stake in the group, on Tuesday demanding an investor vote on a takeover proposal the fund said represented "a major departure from a strategy of focus and integration of existing acquisitions".
The fund said: "The acquisition terms reflect paying a very high valuation multiple," adding that the Monsanto deal could "constrain" Bayer's efforts to build up its pharmaceuticals division "at a time when the future pipeline of this division is a key concern for investors".
"We cannot accept the board's decision to deny shareholders any opportunity to vote on" the Monsanto proposal, Henderson Global Investors said, if acknowledging that Bayer had no obligation to put the deal before a shareholder meeting.
By Mike Verdin