A day after Bayer went public with details of its $62 billion offer for agricultural chemicals rival Monsanto on May 23, the US company rejected the bid as “incomplete and financially inadequate,” while hinting that it was still open for “constructive conversations to assess whether a transaction in the best interest of Monsanto shareowners.”

In a statement, Monsanto’s chairman and CEO Hugh Grant, said: “We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business. However, the current proposal significantly undervalues our company and also does not adequately address or provide reassurance for some of the potential financing and regulatory execution risks related to the acquisition.”

Bayer CEO Werner Baumann commented that his company is pleased that Monsanto’s board shares its belief in the substantial benefits an integrated strategy could provide to growers and broader society, adding, “we are confident that we can address any potential financing or regulatory matters related to the transaction.” Bayer, he said, “remains committed to working together to complete this mutually compelling transaction."

Monsanto’s rejection surprised few observers, as no one thought it would take the bait at $122 per share. In the wake of the announcement, as before, the debate in market circles revolved around what price the US company would consider adequate.

The consensus already seemed to be that Monsanto would find Bayer’s first offer too low, with some speculating that the German player might not be able to pay more. Analysts noted that the bid, funded to 25% by equity with the rest to be paid in cash, would swell the company’s debt to four times EBITDA, excluding pension liabilities.

One analyst, speaking to the British business daily Financial Times, suggested that Bayer had not appeared to deal its hand cleverly.  Calling the German bid “opportunistic,” David Begleiter of Deutsche Bank said, “by not putting its best foot forward, Bayer has ceded the high ground in the takeover battle to Monsanto.”

At least one blogger suggested that more value might be created for shareholders if Bayer to sold its CropScience business to Monsanto, which in this category has 40% higher EBITDA. The proceeds could be used to beef up the company’s pharmaceutical operations, which would surely be smothered under the mountain of debt needed for the US acquisition.

In early trading on May 24, the Monsanto share rose more than 7% to just under $1.06 and gathered additional upwind to approach $1.09 following the rebuff to Bayer. By contrast, the German company’s paper continued to fall, losing as much as 12% against May 19, when Monsanto confirmed the unsolicited bid.