FRANKFURT (Reuters) - German drugmaker Bayer (>> Bayer) on Thursday flagged it might reduce the size of its planned rights issue to fund the planned $66 billion takeover of Monsanto (>> Monsanto), citing proceeds from an antitrust-related asset sale to rival BASF (>> BASF)

"We will also use the net proceeds from the announced divestiture to BASF to refinance the Monsanto acquisition," Chief Executive Werner Baumann said in prepared remarks published ahead of a conference call for journalists.

"As part of the detailed planning ahead of us, we will examine whether and to what extent the equity component of the financing will change as a result," he said.

He also reiterated that the planned capital increase would take place via a rights issue to avoid watering down stakes held by existing investors.

Bayer has agreed to sell seed and herbicide businesses for 5.9 billion euros ($7 billion) to BASF, which analysts have said was richly priced.

So far this year Bayer has also grossed about 4.7 billion euros from selling blocks of share in Covestro (>> Covestro), the plastics business with which it is severing ties.

(Reporting by Ludwig Burger; Editing by Maria Sheahan)

Stocks treated in this article : Monsanto, Bayer, BASF, Covestro