May 29, 2018 / 6:32 AM / 20 days ago

UPDATE 2-KWS seeks to buy Bayer's vegetable business, countering BASF

* Bayer has already agreed vegetable seed sale to BASF

* KWS offer is non-binding, financial terms not disclosed (Adds antitrust status, rationale of KWS’s timing,)

By Ludwig Burger and Patricia Weiss

FRANKFURT, May 29 (Reuters) - German seed seller KWS Saat has made a rival offer for Bayer’s vegetable seed business, a unit Bayer had agreed to sell to BASF as part of its planned merger with Monsanto.

KWS on Tuesday said its non-binding proposal was first made to Bayer on Jan. 26, but not disclosed to investors at the time.

Frustration over Bayer’s rejection despite a “highly attractive price” led KWS to break cover on the bid, in the hope that antitrust regulators will regard it more favourably, KWS Chief Executive Hagen Duenbostel told Reuters.

Having turned down the KWS bid, Bayer continued to negotiate the sale of the vegetable assets - known under the Nunhems brand - with BASF, which was already due to buy other Bayer assets worth 5.9 billion euros ($6.8 billion).

“Somebody has to move. We’ve waited so long, we decided to make a move now to get the ball rolling,” said Duenbostel.

KWS let itself “be guided” by a multiple of close to 17 times earnings before interest, taxes, depreciation and amortisation (EBITDA) for the proposed price, which Duenbostel said was what Bayer agreed to pay for all of Monsanto. He declined to give more detailed terms.

Sales of more than 400 million euros at the vegetable unit and an EBITDA margin of about 20 percent would translate to a bid value of roughly 1.4 billion euros.

BASF last month agreed to pay up to 1.7 billion euros for a bundle of assets comprising Bayer’s vegetable seeds business, seed treatments and digital farming activities.

That would come on top of 5.9 billion euros worth of Bayer assets including soy, cotton and canola seed and herbicide businesses that BASF agreed to buy in October.

While BASF has already secured EU antitrust approval for the October transaction, the go-ahead for BASF to also snap up the vegetable business is still outstanding, a Bayer spokesman said. He declined to comment further.

BASF said it had an agreed deal with Bayer and declined to comment on KWS’s move.

Shares in KWS Saat fell 4.3 percent at 0844 GMT on concern the deal would be too big a financial burden for a buyer with a market value of about 2 billion euros. “Isn’t it a little too big for KWS?” a Frankfurt-based trader said.

Bayer’s bid to buy seed and chemical company Monsanto is on track to win U.S. antitrust approval by the end of May, unless there is a last-minute complication, two people familiar with the matter said in late April. ($1 = 0.8672 euros) (Additional reporting by Christoph Steitz; Editing by Edward Taylor and Alexandra Hudson)

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