Sunday 18 August 2019

Bayer rises on back of tougher Roundup stance

An employee at the Bayer CropScience R&D centre. Photo: Bloomberg
An employee at the Bayer CropScience R&D centre. Photo: Bloomberg

Eyk Henning, Scott Deveau and Tim Loh

Bayer rose the most in a decade after hiring a high-profile lawyer to fight a slew of cases over its Roundup weedkiller and receiving a major vote of confidence from Elliott Management.

Bayer's moves to bolster its response to the wave of Roundup lawsuits, including hiring lawyer John Beisner as an adviser, signal a "step change," the New York-based activist hedge fund said yesterday. The shares rose 8.3pc in Frankfurt trading on Thursday, their biggest intraday gain since March 2009.

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The German company has been dogged by investor unrest since last year's takeover of agricultural giant Monsanto. Activist fund Elliott, which disclosed a $1.3bn stake on Wednesday, said Bayer could unlock €30bn in shareholder value with a settlement.

Bayer's stock has fallen about 40pc since the Monsanto acquisition was completed, wiping out about €40bn of market value.

Disgruntled investors had rebuked the company's management at its annual shareholder meeting in April, as judgments mount from claims that Monsanto's star herbicide, whose active ingredient is the chemical glyphosate, causes cancer. Bayer has said that studies show no cancer link.

The company is starting to shift from a narrowly scientific view of glyphosate's risk toward taking public perception into account, Markus Mayer, an analyst at Baader Bank, wrote in a note to clients. "The chance of legal agreements is rising," he said.



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