Monsanto Co. rejected a $62 billion takeover offer from Bayer AG as too low while saying it’s still open to further deal talks, putting pressure on the German company to raise a bid that has already sent its stock tumbling.

Bayer’s $122-a-share offer also doesn’t “adequately address or provide reassurance for some of the potential financing and regulatory execution risks” related to the deal, St. Louis-based Monsanto’s Chief Executive Officer Hugh Grant said Monday in a statement. Monsanto’s board was unanimous in its rejection of the bid, according to a person with knowledge of the matter.

“We believe in the substantial benefits an integrated strategy could provide to growers and broader society, and we have long respected Bayer’s business,” Grant said.

Bayer will likely come back with a higher bid, Jonas Oxgaard, an analyst with Sanford C. Bernstein & Co. in New York, said today in a note, adding that an offer below $135 per share would be “challenging” for Monsanto to agree to. Monsanto rose 3.1 percent to $109.30 in New York.

Buying Monsanto would create the world’s biggest supplier of farm chemicals and seeds. Monsanto is the largest seed supplier and a pioneer of genetically modified crops, which two decades on from their introduction have come to account for the majority of corn and soybeans grown in the U.S. Monsanto also sells seeds in foreign markets including Latin America and India.

For a Gadfly commentary piece on Monsanto’s rejection, click here.

The offer from Bayer, which was made May 10 in a letter to Monsanto, marks a reversal of roles for the U.S. company. Monsanto previously sought to buy Swiss pesticide maker Syngenta AG, abandoning the $43.7 billion bid in August after the other company refused to agree to a deal.

The crop and seed industry is being reshaped by a series of large transactions that may end up leaving just a few global players who can offer a comprehensive range of products and services to farmers. China National Chemical Corp. agreed in February to acquire Syngenta for about $43 billion. Meanwhile DuPont Co. and Dow Chemical Co. plan to merge and then carve out a new crop-science unit.

Regulatory Scrutiny

Regulators are already examining the proposed $130 billion Dow-DuPont tie-up while national security officials in the U.S. are weighing the ChemChina-Syngenta combination. U.S. senators said Monday they will pay Bayer’s proposed deal close scrutiny. The German company said it doesn’t see major regulatory risks.

Despite its preeminence in seeds, Monsanto has become vulnerable to a takeover as a number of problems piled up this year. The company has cut its earnings forecast, clashed with some of the world’s largest commodity-trading companies and become locked in disputes with the governments of Argentina and India.

Farmers have seen their incomes fall in the last few years amid declining commodity prices, and that’s spurred them to increasingly demand products tailored to their needs, according to Jason Miner, an analyst with Bloomberg Intelligence. Monsanto has become over-reliant on seeds at the expense of crop chemicals such as pesticides, something that spurred the company in its ultimately unsuccessful pursuit of Syngenta, Miner said.

For a QuickTake Q&A on the historical challenges, click here.

Monsanto was founded in 1901 and its first product was the artificial sweetener saccharin. Until the late 1970s, the company produced highly toxic polychlorinated biphenyls, known as PCBs. It was also among companies that manufactured the mixture of herbicides known as Agent Orange and used as a defoliant by the U.S. in the Vietnam War.

Bayer closed 3.2 percent higher at 87.15 euros in Frankfurt. The stock is still down since the company’s interest in a deal was first reported May 12, with some investors concerned that the German drugmaker will need to raise its bid and could end up overpaying. Moody’s Investors Service today placed Bayer’s A3 credit rating under review for a downgrade because of the Monsanto offer.

With assistance from Aaron Kirchfeld and Manuel Baigorri.