Calgene Inc. agreed to a takeover by its majority owner, Monsanto Co., after it increased the offer by 10 percent to $8 per share, for a buyout totaling $240 million.
Monsanto, of St. Louis, in January made an unsolicited bid of $7.25 per share for 30 million Calgene shares, totaling $217.5 million. A committee of three Calgene board members was formed to evaluate the offer and Tuesday Calgene said the group unanimously approved the $8 per share buyout.
Calgene, of Davis, Calif., signed a definitive agreement with Monsanto for the takeover and will begin its tender offer for the Calgene shares Monday.
The $8-per-share price was the same as that paid by Monsanto last year when it boosted its ownership in Calgene to 55 percent with the purchase of 6.25 million shares.
In June 1995, when Monsanto bought a 49.9 percent interest in Calgene, the two companies said the alliance enhanced Monsanto's agricultural biotechnology efforts and provided Calgene with much-needed cash.
In addition to Calgene's acceptance of the takeover bid, shareholders who sued Monsanto claiming the January proposal was unfair agreed the higher offer was reasonable and settled their challenge to the acquisition.
Calgene developed the Flavr Savr tomato, which is modified to delay ripening, and markets other genetically altered plants, such as cotton and canola. The company's BXN cotton is engineered to require fewer chemical herbicides and its Laurical canola oil is derived from rapeseed plants designed to produce a greater percentage of the food ingredient.
Monsanto's agricultural biotechnology products include Posilac BST, which is bovine somatotropin, for boosting cows' milk production along with insect-resistant potatoes and cotton and herbicide-tolerant soybeans and cotton.
Monsanto's stock (NYSE:MTC) closed Tuesday at $37.75, down $0.50. Calgene (NASDAQ:CGNE) ended the day at $7.844, up $0.281. — Charles Craig