"There is nothing there."
Monsanto President Brett Begemann uttered those words last week to a small group of investors and a Reuters reporter when asked how the world's largest seed company he helps lead might fit with German drugs and crop chemicals group Bayer.
Those four words, said on the sidelines of a New York conference, set off a series of events leading to the disclosure of Bayer's confidential, $62 billion bid for Monsanto, the largest all-cash corporate takeover offer on record.
Bayer had sent a confidential acquisition proposal to Monsanto on May 10. Media reports surfaced two days later that Bayer was considering a bid. Initially, neither company would comment on whether any talks were taking place - a common practice for many corporations that prefer to negotiate deals in private.
But Begemann appeared to go a step further than simply declining to comment at the May 18 conference. Monsanto's securities lawyer was concerned that his reply could be interpreted as a denial that any talks were going on, according to a person with knowledge of the situation.
The US Securities and Exchange Commission has strict disclosure rules to protect investors from being misled by companies. To avoid triggering SEC scrutiny, according to the source, Monsanto issued a statement a few hours after Begemann's comment to acknowledge that Bayer had approached the company about a possible takeover.
