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Commodities

Jupiter's Herbert says Bayer/Monsanto deal carries 'significant risks'

Monsanto logo is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. on May 9, 2016. REUTERS/Brendan McDermid/File Photo

LONDON (Reuters) - A shareholder in Bayer said on Tuesday that the German chemical and crop pesticide firm’s potential takeover of rival Monsanto represented significant risks for shareholders.

Late Monday, Bayer said it had sweetened its offer for Monsanto from $125 a share to $127.50 a share, to take the deal value to more than $65 billion.

Greg Herbert, co-manager of the Jupiter Global Equity Income Fund, said he had expected Bayer to come back with a revised offer, and the new deal terms were “probably getting closer to succeeding”.

However, Herbert said the revised terms did not change his view that the deal presents significant risks.

“The company will be left with a highly geared balance sheet and the management effort to integrate the two businesses could easily lead to the larger pharmaceutical business being neglected,” he wrote in emailed comments.

Jupiter Fund Management, a leading UK asset manager, is currently the 31st biggest shareholder in Bayer, given its holdings across several funds, out of a total of nearly 1,000 investors.

Reporting by Simon Jessop; Editing by Rachel Armstrong

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