By: Ed Hammond, Jeffrey McCracken, and Aaron Kirchfeld
Paulson & Co., the hedge fund of billionaire investor John Paulson, has taken a stake in Syngenta AG in a sign the firm backs a takeover attempt by Monsanto Co., people with knowledge of the matter said.
Paulson & Co. has amassed a large number of shares in the Swiss pesticide company that’s trying to fend off a $45 billion takeover offer from U.S. rival Monsanto Co. and is supportive of a deal between the two, said the people, who asked not to be identified discussing private information.
The stake, which hasn’t been publicly disclosed, may put Paulson & Co. among the 20 largest shareholders in Syngenta, one person said. John Paulson has a reputation for using his hedge fund to take large positions in companies engaged in ongoing merger discussions and voicing his support for a transaction. It’s not clear if Paulson will go public with his stake and his support of a Monsanto-Syngenta merger.
The Swiss company increased 1.6 percent to 394 francs a share as of 9:03 a.m. in Zurich, short of the 449 francs offered by its suitor.
Syngenta in May rejected Monsanto’s initial offer as inadequate. Despite the rebuff, St. Louis-based Monsanto is pressing on with its attempt to acquire the Basel-based company in what would be the crop-chemical industry’s largest ever deal. Monsanto and Syngenta have engaged in talks during recent weeks and have failed to reach an accord on what the latter sees as unacceptably high antitrust risks.
Monsanto, which has spent the past month lobbying Syngenta shareholders to back a deal, is preparing to step up its charm offensive. The U.S. company hired Georgeson Inc., the proxy solicitation firm, and Vontobel Holding AG, a Swiss investment bank, in the past week, a person familiar with the matter said.
A representative for Paulson & Co. declined to comment. Spokesmen for Monsanto and Syngenta didn’t immediately return calls seeking comment. Spokesmen for Georgeson and Vontobel didn’t immediately respond to requests for comment left outside regular business hours.
Syngenta Chairman Michel Demare has called Monsanto’s bid simplistic and unlikely to get approval from competition authorities. Monsanto has said it plans to sell off Syngenta’s seed business and other assets to satisfy antitrust concerns.
The Swiss company reports first-half earnings July 23.
Originally Published: Bloomberg Business