WEBVTT - Bloomberg's Miner on Bayer's $62 Billion Monsanto Bid (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleven LEO to Washington,

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<v Speaker 1>dot Com. This is taking Stock. I'm Kathleen Hayes along

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<v Speaker 1>with pim Fox a special show as we broadcast live Tucson,

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<v Speaker 1>Arizona Invested sixteen the Power of Big Ideas of B

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<v Speaker 1>and Y Melon Client Conference. We're gonna be speaking in

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<v Speaker 1>this half hour with Samir Pandery from Assets Servicing at

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<v Speaker 1>B and Y Melon on big data and the fintech challenge,

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<v Speaker 1>and we can got to dive into as well. This

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<v Speaker 1>big buyer on Santo deal. Jason Miner is gonna be

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<v Speaker 1>joining us from Bloomberg Intelligence. Let's get back to Bloomberg

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<v Speaker 1>World headquarters in New York City. Katherine Cardy has a

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<v Speaker 1>Bloomberg Business Flash. Thank you, Kathleen. Bloomberg. Taking brought you

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<v Speaker 1>by Persons Inside twenty sixteen. The must attend the event

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<v Speaker 1>for advisers less than two weeks away June seventh through

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<v Speaker 1>the night. If you hadn't registered, you still can visit

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<v Speaker 1>insides Steen dot com. That's I N S I T

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<v Speaker 1>E dot com. Well stocks are fluctuating today as investors

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<v Speaker 1>await further direction on the health of the economy and

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<v Speaker 1>prospects for higher interest rates. Monsanto shares have been up

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<v Speaker 1>as much as seven point seven percent. Monsanto has yet

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<v Speaker 1>to respond to BYRUS sixty two billion dollar takeover offer.

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<v Speaker 1>According to a senior US government official, Monsanto's chief executive

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<v Speaker 1>is surprised by the deal. By I made the offer

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<v Speaker 1>as it seeks to become the world's biggest seller of

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<v Speaker 1>seats and farm chemicals, tapping into growing demand at a

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<v Speaker 1>time when farmers must foose productivity to feed an estimated

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<v Speaker 1>ten billion people globally by twenty fifteen. For Navoman, chairman

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<v Speaker 1>and CEO of Buyer, spoke on Bloomberg TV, and he

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<v Speaker 1>said that a takeover Monsanto will benefit shareholders of both

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<v Speaker 1>companies in the first year off the closing. The transaction

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<v Speaker 1>already vc double digits to share acretion and with it

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<v Speaker 1>also the ability to pay a higher dividend to our shareholders.

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<v Speaker 1>And we check the markets every fifteen minutes throughout the

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<v Speaker 1>trading day down. Industrial laverage currently up forty seven points

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<v Speaker 1>at quarter percent, trading a seventeen thousand, five hundred forty

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<v Speaker 1>seven SMP five foundered up two point to tenth of

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<v Speaker 1>a percent, trading at two thousand fifty four nastacked up

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<v Speaker 1>fourteen points a third of a percentage. Trading at forty

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<v Speaker 1>three West Texas Intermediate Crude Royal down thirty cents of barrel,

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<v Speaker 1>a loss of two thirds of a percent, Trading at

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<v Speaker 1>forty eleven spoke bolled down a dollar thirty announce at

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<v Speaker 1>twelve fifty one sixty and the tenure Treasury is up

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<v Speaker 1>one thirty second with the yield of one point eight

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<v Speaker 1>three percent. And now we'll look at some of the

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<v Speaker 1>other stories were following today. Thank you Catherine from the

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<v Speaker 1>Boomberg news room. I'm Bonnie Quinn, a Baltimore officer and

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<v Speaker 1>has been acquitted of assault and other charges in connection

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<v Speaker 1>with the death of Freddie Gray. Gray died after being

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<v Speaker 1>injured while in police constanding. Officer Edward Nero was one

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<v Speaker 1>of six Baltimore police officers charged in the case. President

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<v Speaker 1>Obama says the US is lifting its ban on weapons

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<v Speaker 1>sales to Vietnam The President made the announcement at a

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<v Speaker 1>news conference in Hanoi. This change will ensure that Vietnam

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<v Speaker 1>has access to the equipment it needs to defend itself

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<v Speaker 1>and removes a lingering vestige of the Cold War. The

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<v Speaker 1>US has provided almost forty six million dollars since Vietnam's

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<v Speaker 1>efforts to strengthen its maritime security capabilities. Wait times that

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<v Speaker 1>airport security checkpoints are getting longer now t s AS

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<v Speaker 1>chief is headed to Capitol Hill to face lowmakers. More

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<v Speaker 1>from Amy Morris in the Boomberg Newsroom in Washington. Peter

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<v Speaker 1>Netinger is the sixth administrator of t s A and

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<v Speaker 1>has been on the job for less than a year,

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<v Speaker 1>but the Washington Post reports that job maybe in jeopardy.

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<v Speaker 1>Nehinger is headed to Capitol Hill this week to explain

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<v Speaker 1>to lawmakers why travelers are waiting in longer and longer

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<v Speaker 1>security checkpoint lines as the busy summer travel season is

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<v Speaker 1>only just beginning. Democrat Adam Schiff and Republican Edward Royce,

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<v Speaker 1>both of California, tells ABC's This Week they're not ruling

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<v Speaker 1>out a change in the administrator's office. Amy Morris, Bloomberg Radio,

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<v Speaker 1>Washington New Jersey Governor Chris Christie has rejected legislation that

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<v Speaker 1>overhauls the powerful Port Authority of New York and New Jersey,

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<v Speaker 1>and Christie conditionally vetoed the measure pass by the Democrat

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<v Speaker 1>led legislature in April. Instead, he's recommending that lowmakers adopt

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<v Speaker 1>a bill similar to the one already enacted. In New

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<v Speaker 1>York Global News twenty four hours a day, powered by

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<v Speaker 1>our twenty four journalists more than one bureaus around the

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<v Speaker 1>world from the Bloomberg Newsroom and Vanny Quinn Catherine, thank you,

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<v Speaker 1>and now let's get a recap. The Dow Industrial Average

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<v Speaker 1>is up forty three points, trading at seventeen thousand, five

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<v Speaker 1>hundred forty three. Smp F I founded up a point

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<v Speaker 1>in half at two thousand fifty three. Nastack higher by thirteen,

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<v Speaker 1>trading at two And that's a Bloomberg business flash. You're

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<v Speaker 1>listening to Taking Stock with Kathleen Hayes and Pim Fox

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<v Speaker 1>on Bloomberg Radio. They are broadcasting live from the p

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<v Speaker 1>n Y Melan Assets Servicing Conference in Tucson, Arizona. And

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<v Speaker 1>Tim Fox with my co host at Kathleen Hayes, let's

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<v Speaker 1>turn our attention now to a big potential acquisition in

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<v Speaker 1>the chemicals industry. Jason Meiner is senior, a global chemicals

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<v Speaker 1>analyst for Bloomberg Intelligence, and he's sorry here to tell

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<v Speaker 1>us a little bit more about a sixty two billion

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<v Speaker 1>dollar cash bid for mon Santo. Jason, great to have you,

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<v Speaker 1>as always, Uh is Monsanto worth sixty two billion dollars?

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<v Speaker 1>You know stand alone? The market has not said it is.

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<v Speaker 1>But the whole thing here is the bundle. Right. We've

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<v Speaker 1>spoken before about how this is sort of the incredible

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<v Speaker 1>hulk of the ag chem space and that's taking greater shape.

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<v Speaker 1>You know, if you if Montana makes a peanut butter

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<v Speaker 1>and Bear makes the jelly, is the sandwich worth fifty two?

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<v Speaker 1>It's um It's the kind of premium that you kind

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<v Speaker 1>of typically see in this space. So maybe so, But

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<v Speaker 1>the shares aren't up to the bid yet, So what

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<v Speaker 1>does that tell you? So there's a lot of skepticism,

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<v Speaker 1>and I think the main question floating around this morning

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<v Speaker 1>has been about UM overlaps and regulatory concern. You know,

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<v Speaker 1>this is a space where there are six um enormous

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<v Speaker 1>companies globally UM three now four of which are involved

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<v Speaker 1>in in deals or potential deals, um and so. On

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<v Speaker 1>the one hand, there's a question of concentration. And on

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<v Speaker 1>the other hand, these are pretty complimentary businesses individually. Well, Jason, uh,

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<v Speaker 1>they are complementary. I like, I love metaphors and analogy,

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<v Speaker 1>so I love the peanut butter and jelly. But you know,

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<v Speaker 1>maybe the problem is that buyer thinks this is more

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<v Speaker 1>like a very wonderful black forest ham and some wonderful

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<v Speaker 1>German cheese, and the market saying no, it's more just

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<v Speaker 1>like peanut butter and jelly. It's the sandwich just isn't

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<v Speaker 1>gonna be worth that much. Right there, there's a little

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<v Speaker 1>bit too to suggest that you know that this is

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<v Speaker 1>a trend. This is now the third and a major

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<v Speaker 1>step in a trend of bundling across this space. And

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<v Speaker 1>now DuPont was the most recent to kind of push

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<v Speaker 1>this forward, gonna put together a great seed business to

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<v Speaker 1>DuPont and a great chemicals business to Dow and do

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<v Speaker 1>a similar thing here, although this one would be much

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<v Speaker 1>larger the bironment standard one. But it's not a proven model, right.

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<v Speaker 1>This is something cin Genta actually kicked off back in twelve.

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<v Speaker 1>They said, well, we'll integrate this stuff. Some of the competitors, though, say, um,

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<v Speaker 1>and there's some reason to expect this is true. Of course,

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<v Speaker 1>that when you walk onto a farm and say we're

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<v Speaker 1>your single source for everything, you're met with a lot

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<v Speaker 1>of skepticism. There aren't a whole lot of farmers around

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<v Speaker 1>the world who want to go to one source. Farmers

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<v Speaker 1>are very entrepreneurial. They like to play suppliers off one another,

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<v Speaker 1>so it's not entirely a proven model. Maybe the black

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<v Speaker 1>Forest ham is a a pipe tream. Maybe I'm mixing

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<v Speaker 1>metaphors black Forest Hams and pipe treams. I like the mixture.

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<v Speaker 1>They they're gonna somehow tease this all apart because we

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<v Speaker 1>go through these cycles, right, Jason. I mean they put

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<v Speaker 1>it all together with the help of bankers, and the

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<v Speaker 1>deal gets done, and then they find out later that

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<v Speaker 1>they end up with a big ride off from Goodwill

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<v Speaker 1>and that the deal really the culture to mash something

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<v Speaker 1>didn't happen. And the idea that these things are you know,

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<v Speaker 1>I've done and dusted. It's like the hard work is

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<v Speaker 1>nowhere near beginning. Yeah, there's a there's a bigger dissimilarity here.

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<v Speaker 1>And I've spent a little time today talking to some

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<v Speaker 1>of our analysts and healthcare on the chemicals guy. But

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<v Speaker 1>what they tell me is, you know, unless you're going

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<v Speaker 1>to resuscitate the bugs after you kill them, the healthcare

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<v Speaker 1>business and the herbicides business aren't an obvious fit. Um.

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<v Speaker 1>And so another set of questions today is around whether

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<v Speaker 1>Bear shareholders really want to own both. Management has made

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<v Speaker 1>the point there's some similarities and how you approach regulators

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<v Speaker 1>in R and D, but those two pieces are a

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<v Speaker 1>very dissimilar portfolio at the higher levels. Certainly. Well, I'm

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<v Speaker 1>so glad you said that, Jason, because I've been feeling

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<v Speaker 1>kind of like that. I guess it's the obvious question

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<v Speaker 1>I did. I didn't ask. I just thought, like, as

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<v Speaker 1>everybody thinks, this is a good idea. But that's exactly

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<v Speaker 1>what it struck me, because they are very different. But

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<v Speaker 1>one of the one of my favorite stories on on

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<v Speaker 1>the Bloomberg today. Uh, but Monsanto name hated by anti

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<v Speaker 1>GMO force, is may vanish in a buyer deal. Uh.

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<v Speaker 1>In Europe, of course, the anti GMO movement has been very,

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<v Speaker 1>very strong, maybe picking up some steam in the US.

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<v Speaker 1>We're a farmers stand on that I find very interesting

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<v Speaker 1>what you said about them maybe not wanting to only

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<v Speaker 1>go to one supplier, they want to have different suppliers.

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<v Speaker 1>How much difference does this make this whole GMO controversy. Well,

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<v Speaker 1>you know, farmers are very in favor of the technology.

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<v Speaker 1>It's certainly they've adopted it of their own choice. It's

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<v Speaker 1>something that has brought them greater profitability in all its

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<v Speaker 1>shapes and forms in various places. Um. But there is

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<v Speaker 1>a negative in the mont Santo Um, you know, moving

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<v Speaker 1>out of St. Louis. If your target markets in the

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<v Speaker 1>corn belt, Um, you know, I suppose a lot of

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<v Speaker 1>the names farmers recognized will be preserved. But I do

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<v Speaker 1>think that the name change, um, you know, well in

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<v Speaker 1>the supermarket and among the GMO folks, that maybe it's

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<v Speaker 1>a positive if it's a dastardly name it is. Um,

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<v Speaker 1>there's a bit of a bit of challenge um selling

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<v Speaker 1>this move in the corn belt for sure. Well, having

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<v Speaker 1>trouble selling at the Bear investors. Bear shares a Bear

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<v Speaker 1>are down a little bit, almost six percent down five

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<v Speaker 1>and three quarters up. Mont Santos, yes, they're up significantly

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<v Speaker 1>on on this. Mont Santo shares are up a four

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<v Speaker 1>and a half percent, you know, so it doesn't look

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<v Speaker 1>as other bear investors believe that seeds and pesticides go together.

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<v Speaker 1>With Asper, Jason, what's the next thing we're looking for

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<v Speaker 1>in this deal? What's the next step that has to

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<v Speaker 1>be taken that we're going to market's gonna be responding

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<v Speaker 1>to Yeah, I think that, Um, we'll be waiting for

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<v Speaker 1>another bit. You know, in this situation, you'd imagine Montsanta

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<v Speaker 1>would would like to be seen to hold out and

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<v Speaker 1>at least push a bit higher. Um. But they made

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<v Speaker 1>the case on their own that these things went together

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<v Speaker 1>when they were a person agenda. So it's tough to

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<v Speaker 1>few where it goes. But next, Jason Miner, thank you

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<v Speaker 1>so very much. Terrific conversation looking at buyer's bid sixty

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<v Speaker 1>two billion dollars to buy mont Santo. Entrepreneurial farmers may

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<v Speaker 1>not be on board. Investors wondering about it too. Kathene Hayes,

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<v Speaker 1>along with pin Fox taking Stock on Bloomberg Radio, Bloomberg

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