Monsanto Co., the world’s largest seed company, will reject Bayer AG’s $62 billion acquisition bid and seek a higher price, two people familiar with the matter said on Tuesday.

Monsanto can see the logic of combining with the German drugs and crop chemicals group, and believes a deal could get the necessary antitrust and other regulatory approvals, the people said, leaving the door open for further negotiations.

Bayer will now have to decide whether to raise its bid, even as the company faces criticism from some shareholders that its $122-per-share offer is already too high. The other options are to walk away, or mount a hostile bid.

Monsanto shares rose 1.5 percent to $107.61 in late-morning trading in New York, but remain far below Bayer’s bid price, underscoring investor skepticism that a deal will be reached. Bayer shares rose 3.23 percent at 87.15 euros in Frankfurt.

Monsanto and Bayer declined to comment.

It was not clear what price Monsanto would be willing to sell for.

The St. Louis-based company has confidence in its standalone plan and believes shareholders deserve a better offer, the people said. They asked not to be identified because the deliberations are confidential.

Global agrochemicals companies are racing to consolidate, partly in response to a drop in commodity prices that has hit farm incomes. Seeds and pesticides markets are also increasingly converging.

ChemChina plans to buy Switzerland’s Syngenta for $43 billion, after Syngenta rejected a bid from Monsanto. Dow Chemical Co. and DuPont are forging a $130 billion business.

With German rival BASF SE having previously considered a tie-up with Monsanto, Bayer has moved to avoid being left behind.

Leverkusen-based Bayer’s unsolicited bid for Monsanto is the largest all-cash takeover on record, according to Thomson Reuters data, just ahead of InBev SA’s $60.4 billion offer for Anheuser-Busch in June 2008.

Bayer said on Monday it would finance its cash bid with a combination of debt and equity.