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NEW YORK. – One problem with conglomerates is that there is something to dislike for everyone. Bayer’s bid to buy US seeds and pesticides company Monsanto risks suffering the same affliction, at least as far as its shareholders are concerned. This remains true, even if details released Monday of the $62 billion offer including debt look better than expected.Bayer, whose business spans pharmaceuticals, crop sciences and consumer health, seems to be shovelling as much low-cost debt as possible into the all-cash deal, which helped it promise a substantial uplift to earnings and play down the need for asset sales.

It plans to sell some $15 billion in discounted equity — hefty but below most forecasts — after it confirmed its approach last week.

It all makes sense from a deal-making perspective. Monsanto would be unlikely to welcome German stock as deal payment; Promising to finance the deal without relying on asset sales removes one source of uncertainty the US company could have bemoaned.

But this structure leaves Bayer shareholders squarely on the hook for the risk involved in a mammoth, quasi-hostile deal-making adventure that, both in size and strategy, has caused some surprise.

Monsanto, which has previously presented itself as a buyer in the fast-consolidating world of agricultural chemicals, is unlikely to accept the first price on offer.

At 15,8 times earnings before interest, tax, depreciation and amortization, Bayer’s offer is hardly stingy.

But it also falls short of the knock-out 17 times that ChemChina paid for Syngenta.

With the deal already set to push Bayer’s net debt including pension liabilities towards five times Ebitda, according to Sanford C Bernstein, the fear is that deal sweeteners must come from equity, not debt, meaning a bigger hit to investors.

An all-cash deal means Bayer investors will reap the full value of the benefits of combining.

But the value of the promised $1,5 billion in synergies on offer, the vast majority of which is cost savings, don’t cover the premium being handed to Monsanto’s shareholders, even at the current price.

Meanwhile, Bayer’s pharma-focused investors may simply not like the long-term vision on offer. Pointing to rising population, climate change and a shortfall of arable land by 2050 manages to make pharmaceutical investment look a near-term game.

Rightly or wrongly, many investors thought of Bayer as a healthcare stock, one that needed to invest in its pipeline to boot.

The need to pay down debt will clearly inhibit other deals to bolster that business.

Even if all goes to plan, a lengthy period of negotiation looms, first with Monsanto, then regulators.

Meanwhile, pharma fanatics can find more pipeline excitement with fewer complications elsewhere, while agrochemical enthusiasts hardly need rush in.

Succeed or fail, Bayer’s Monsanto bid could leave it out of sorts for some time. – wsj.