Syngenta has come very right over the last few days as rumours of a bid from Monsanto have morphed into an actual shares/cash bid worth c. CHF450/share...which Syngenta's management has turned down saying it 'substantially undervalues the company'.
Well this is ballsy at face value given that the share has pushed up c. 10% above my top of the range calculation (shown at this link for the US dollar quote). Clearly you have to pay for control but essentially my instinct on the maths today is that you have around 10%+ upside and the same downside percentage if Monsanto walk away. When you get such a balanced pay-off matrix then maybe it is time to start thinking about getting the top-slicer out...
It is clear that Monsanto want the asset predominately for the crop protection side...but also with the knowledge that they can help outwit the anti-trust authorities on the seed side by hiving it off at a pretty price to a range of potential buyers (DuPont, Dow Chemical, Bayer, BASF to name a few) looking to bulk-up in this oh-so-solid agricultural area.
So far I have done nothing re my Syngenta position but without some further deal evolution over the weekend press my instinct would be to top-slice at the c. CHF400 (or US$ equivalent) level on Monday.
No matter how good the theme it is never a dire idea to take a bit of profit now and again. As the famous saying goes on how to become rich it is 'by selling too soon'.