MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 NEWS EUROPE: SYNGENTA MONSANTO: Syngenta AG, target of an unwanted $45 billion takeover approach by Monsanto Co., said its U.S. suitor has failed to convince it of the merits of a merger and is just repeating the “same indequate price” with the same flawed view of the execution risks. The only change in Monsanto’s proposal since the first offer tabled on April 18 is a “wholly inadequate” break fee of $2 billion, the Basel, Switzerland-based maker of agrochemicals and seeds said in a release. Frustration is creeping into Syngenta’s demeanor, faced with the detrimental effect on business a prolonged pursuit may have and amid widespread expectations among investors of a higher offer. Chief Executive Officer Mike Mack has trodden a careful path since the initial approach, acknowledging the need to do proper due diligence on Monsanto’s plan to create an agricultural-products powerhouse, while emphasizing the prospects the company has on its own. “It’s not the end of the takeover saga,” said Markus Mayer, an analyst at Baader Bank AG, who has a “buy” rating on Syngenta. “The second offer was not a big change -- just a breakup fee. It shows that Monsanto is still interested.” Monsanto is looking to jumpstart talks on combining its leading franchise for genetically modified seeds with the world’s largest maker of agricultural chemicals. The break-up fee would be payable if Monsanto is unable to obtain global regulatory approvals by selling all overlapping businesses. Syngenta rejected the 449 francs-a-share bid, with 45 percent in cash, saying it undervalued the company and doesn’t sufficiently compensate for antitrust risks. Syngenta would consider entering talks if Monsanto raises its offer and adds a multibillion-dollar termination fee in the ballpark of 10 percent of the purchase price, people with knowledge of the situation said last week. “The respective outside counsel of Syngenta and Monsanto met on three separate occasions, subsequent to our rejection letter, to discuss in good faith the regulatory challenges,” Syngenta said Monday. “These meetings have reinforced Syngenta’s assessment of the regulatory risks and Monsanto has made no attempt to seriously address these concerns. Monsanto continues to gloss over these fundamental transaction risks.” Baader’s Mayer said Monsanto will have to sweeten its bid to at least the 500-franc mark -- the analyst’s target price -- or change the equity or cash components of the deal. Monsanto, based in St. Louis, has pledged to sell Syngenta’s seed and genetically engineered traits as well as any overlapping crop chemicals to win regulatory approval. Chemicals that would be sold include Syngenta’s glyphosate and acetochlor herbicides, a person with knowledge of the matter said last week. Syngenta said it’s at the start of a “significant upturn in innovation” that will help margins climb to 24 percent to 26 percent by 2018. “It is disappointing that Syngenta has not engaged in substantive discussions about the many benefits of this combination,” Monsanto Chairman and Chief Executive Officer Hugh Grant said in the statement. Monsanto is committed to “pursuing constructive conversation with Syngenta’s management and board,” he said. Monsanto’s bid represented a 43 percent premium to Syngenta’s share price at the close on April 30, just before Bloomberg News reported the proposal. SAINT-GOBAIN Apollo Global Management LLC offered 2.945 billion euros ($3.3 billion) for Cie. de Saint-Gobain SA’s glass- packaging unit Verallia. Saint-Gobain is in exclusive talks with Apollo over a deal, the Courbevoie, France- based company said in a statement today. Saint-Gobain Chief Executive Officer Pierre-Andre de Chalendar said Thursday that Verallia attracted five bids. The company is selling the business as it refocuses on building materials. Saint-Gobain already sold the North American part of the unit to Ardagh Group SA for $1.7 billion. Saint-Gobain last year said it would seek to reach an agreement with a buyer before mid-2015. The company is also battling to take control of Swiss adhesives maker Sika AG. ALLIANCE TRUST Broker reluctantly tips Alliance as a 'buy' saying the 'discount is attractive'. Demand for crisis-hit Alliance Trust’s shares has sagged following a recent management U-turn, and they 0are now sufficiently attractively priced for one leading broker to cite them as a “buy”. But it is not a wholehearted recommendation. Canaccord Genuity said while “Alliance is sailing in uncharted waters”, the “discount is attractive”. It concluded the investment trust, one of the biggest in the UK, was a “quantitative more than qualitative” buy. The graph, below, shows how the gap between Alliance’s share price and the value of the underlying assets owned by the trust has widened. Underlying assets per share are now worth 13pc more than the shares themselves. Alliance’s troubles stem from years of lacklustre performance, encouraging one rebel shareholder – Elliott Advisors – to build a large holding in the hope of effecting management change. Earlier this year Elliott sought to place three new directors on the trust’s board. Alliance’s incumbent management, having April 15, 2015 2