U.S. seed company Monsanto Co MON.N turned down a sweetened US$64 billion acquisition offer from Bayer AG BAYGn.DE, but said it was open to further talks with the German healthcare and chemicals group as well as other parties.

The widely expected rejection puts pressure on Bayer to sweeten its offer, at least enough to get access to Monsanto's books. The two companies have been in discussions about a potential confidentiality agreement, Reuters reported on Monday.

Monsanto said on Tuesday its board unanimously viewed Bayer's latest bid as "financially inadequate and insufficient to ensure deal certainty."

"Monsanto remains open to continued and constructive conversations with Bayer and other parties to assess whether a transaction that the board believes is in the best interest of Monsanto shareowners can be realized," the company said.

Bayer will examine Monsanto's response to the revised offer, a company spokesman said.

The German company disclosed last Thursday that it increased its bid by US$3 per share. Its latest US$125-per-share offer is the largest all-cash bid on record. Bayer also offered a US$1.5 billion reverse anti-trust breakup fee, equivalent to about 2.3 per cent of the deal's value.

By comparison, the breakup fee ChemChina offered in order to acquire Swiss peer Syngenta SYNN.S should the deal not go through is US$3 billion, representing 7 per cent of the US$43 billion transaction value.

Monsanto would like Bayer to sweeten its offer further, including increasing the breakup fee, before providing Bayer access to financial information, according to people familiar with the matter who asked not to be identified discussing private discussions.

Monsanto's shares were up 1 per cent while Bayer shares were down 1.4 per cent at 91.60 euros.

Access to confidential information has been a major sticking point in Bayer's negotiations with Monsanto ever since the German company offered to acquire Monsanto in May.

Bayer argued last week that it had comprehensively addressed Monsanto's questions about financing and regulatory matters and said it was prepared to make certain commitments to regulators, if required, to complete a deal.

Henderson Global Investors HGGH.L, an investor in Bayer, has called for a vote on the proposed takeover of Monsanto, which it said threatened the long-term strength of the German company. Some other Bayer investors have also expressed concerns the company may overpay to secure a deal.

The seeds and agrochemicals industry has been jolted by several large deals in the past year as low crop prices and belt-tightening by farmers pressured earnings.

Syngenta AG, which Monsanto tried to buy last year, agreed in February to be acquired by ChemChina for US$43 billion. Dow Chemical Co DOW.N and DuPont DD.N struck a US$130 billion mega-merger late last year.

Morgan Stanley & Co and Ducera Partners are Monsanto's financial advisers and Wachtell, Lipton, Rosen & Katz is its legal adviser.

Up to Monday's close, Monsanto shares had risen 5.3 per cent since Bayer disclosed its higher offer on July 14. Bayer shares have fallen about 1 per cent in the same period.