Shares in Syngenta eased, after agrichemicals giant rejected a second takeover offer from US rival Monsanto, which the Swiss-based rival said "continues to gloss over" potential antitrust concerns to a deal.
Monsanto overnight restated a $45bn, or SFr449 per share, offer for Syngenta but with a $2bn break fee attached, which would become payable to the Swiss group if the deal were scuppered by antitrust concerns.
"After three meetings over the last month with your antitrust team, we do not believe they have raised any credible theory that could be used to impede our proposed merger on the basis of competition concerns," Monsanto said in a letter to Syngenta.
"Nevertheless, as a sign of our high degree of confidence in obtaining the necessary regulatory approvals, we are willing to commit to a reverse break-up fee of $2bn payable if we are unable to consummate the transaction for antitrust reasons within 18 months."
"Such a fee would be among the highest reverse break-up fees that any company has agreed to."
However, Syngenta snubbed the revised proposal, which the group said offered "the same inadequate price, same inadequate regulatory undertakings to close, same regulatory risks", besides the "same issues associated with dual headquarters' moves".
The Monsanto offer of a $2bn break fee was "paltry… relative to such fees seen in transactions with comparable levels of regulatory risk" and "in no way adequately addressed" the threat to Syngenta from agreeing to a takeover, only to see the deal founder.
"If a transaction were to be announced and not consummated, there would be significant harm and value destruction for Syngenta and its shareholders," the group said in a letter to investors.
Indeed, the meetings with Monsanto had only "reinforced" Syngenta's concerns over antitrust, the letter said.
"Monsanto continues to gloss over these fundamental transaction risks," it added.
Monsanto, in making its revised offer, voiced a "high degree of confidence" that it would obtain "timely regulatory approval", largely through selling off Syngenta's seeds business and some agrichemicals assets in which both companies had large market positions.
However Syngenta said that it "does not think the regulatory issues are resolved as simply as by a pre-agreed and pre-announced package" of asset sales.
There were "notable examples" of deals which regulators had blocked due to broader "conglomerate concerns", the Swiss group said, adding that it "has concern that a combination between Monsanto and Syngenta may be viewed as such".
The impact on Syngenta shares of the rejection was to send them 0.7% lower to SFr410.00, further short of the SFr449 being offered by Monsanto, although well above the SFr332.70 that the stock stood at before the bid was revealed.
There had been market talk that Monsanto was preparing to raise its offer price.
The US group said that its current bid represented a multiple of 15.8 times Syngenta's earnings before interest, tax, depreciation and amortisation (ebitda) for 2014, a "significantly higher" figure than seen in other deals in the sector.
Last year, Platform Specialty Products had paid 11.5 times ebitda, for the previous 12 months, in buying Arysta LifeScience, and 10.0 times for Chemtura Agrosolutions.
In 2001, Bayer paid 10.2 times for Aventis Corp, and in 2000 BASF paid 11.8 times for Cynamid.