A top investor in German chemicals company Bayer said he was "deeply concerned" about a potential acquisition of U.S. rival Monsanto, and would prefer the firms to agree a joint venture or a nil-premium merger.
Maximillian Anderl, a fund manager at UBS Global Asset Management, said he was surprised by Bayer's unsolicited takeover approach given the management team was fairly new and settling in, and a recent acquisition in consumer health had yet to be integrated successfully.
"We are deeply concerned in case of a full acquisition of Monsanto as Bayer would not have the debt capacity, and issuing shares with a more than 60 percent lower valuation before any premium is value destroying," Anderl said in emailed comments.
"This is reflected by the weak share price reaction in the market. A formation of a JV or a no premium merger (at prices before deal announcements) would be a much better solution for Bayer," he added.
UBS is among Bayer's top-30 investors, according to Reuters Eikon data.