Topic: How To Invest

Wall Street Stock Forecaster Hotline – Friday, September 16, 2016

Article Excerpt

MONSANTO CO., $103.45, New York symbol MON, develops and sells technology-based agricultural products, such as genetically modified seeds, to farmers, grain processors and food companies. It also makes weed- and pest-control products. The company has accepted an $128.00-a-share takeover offer from German chemical and pharmaceutical maker Bayer AG. The all-cash deal is worth $66 billion and includes Monsanto’s debt. As part of the takeover, Bayer has agreed to pay Monsanto a $2.0 billion breakup fee if it can’t complete the purchase. They aim to close the deal by the end of 2017. Monsanto’s stock continues to trade well below Bayer’s offer. That’s due to concerns that regulators in the U.S and Europe will block the deal, or force the merged company to sell certain assets. Even if Bayer has to abandon the takeover, Monsanto can use the breakup fee to buy back shares or increase its dividend; the current annual rate of $2.16 a share yields 2.1%. OUR RECOMMENDATION: Monsanto is still a buy. Monsanto…