Monsanto walked away from the table in its buyout offer for Syngenta. Where does that leave the two agricultural product giants? What lessons can be learned from the walk-away? Here's the risk of a failed buyout.
On August 26, 2015, Monsanto abandoned its $47B bid to buy up Syngenta. It had offered 470 Swiss francs a share. We outsiders can’t know what truly went on behind closed doors. We do see the fall-out, however.
First, Syngenta shareholders are now demanding the company prove how the value is above Monsanto’s offered $47 billion offer. Owners want to see that value in the company, since they are missing out on the high-dollar cash that was previously on the horizon for them. Since the offer was taken off the table, the stock price fell, making it even harder for shareholders to swallow.
Next, Syngenta shareholders are asking what is next for the company without its former suitor Monsanto. Investors are wondering what the company plans to do to improve value. The response from the company will be interesting as this billion-dollar drama plays out.
Finally, Monsanto is looking at what’s next. This may be another target in its pocket or another pass at Syngenta down the road. Monsanto investors have been largely silent, but they are certainly wondering what Monsanto’s Plan B is as well.
Keep these lessons in mind as you navigate your buyout. It could save you from getting into some hot water with your stakeholders after a deal unexpectedly falls through.
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