Calgene Inc.'s majority owner, Monsanto Co., has offered to pay $7.25 per share to takeover the rest of the agricultural biotechnology company in an unsolicited bid worth more than $215 million to the minority shareholders.
Monsanto, of St. Louis, purchased 49.9 percent of Davis, Calif.-based Calgene in June 1995. The next year, Monsanto increased its ownership to about 55 percent with the purchase of $6.25 million Calgene shares at $8 per share.
The two companies agreed if Monsanto wanted to increase its ownership to 70 percent or more before Sept. 30, 1998, it would have to get approval from a committee of Calgene board members not affiliated with either Calgene or Monsanto.
The committee, which will evaluate the fairness of the Monsanto offer, will consist of three directors from the nine-member Calgene board. No date was set for a response to the Monsanto offer.
At $7.25 per share, Monsanto's buy out of the 45 percent, or 30 million shares, of Calgene it does not own would cost $217.5 million.
The share price offered by Monsanto is a 32 percent premium to the $5.5 closing price of Calgene's stock (NASDAQ:CGNE) Tuesday. Calgene ended Wednesday up $1.968 to $7.468.
When Calgene and Monsanto teamed up in June 1995, the former needed cash and the latter wanted to strengthen its position in agricultural biotechnology. (See BioWorld Today, June 29, 1995, p. 1.)
Calgene developed the Flavr Savr tomato, which is modified to delay ripening, and markets other genetically engineered plants, such as cotton and canola. The company's BXN cotton is altered 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 stock (NYSE:MTC) closed Wednesday at 37.25, down $0.625. * Charles Craig