Singapore's Temasek Says its Long-Term Thesis on Bayer Investment Holds True
09 July 2019 - 11:30PM
Dow Jones News
By Gaurav Raghuvanshi and P.R.Venkat
SINGAPORE--Bayer AG's (BAYN.XE) biggest institutional investor,
Temasek Holdings, says it is encouraged by the German company's
engagement of its supervisory board and management team to monitor
litigation linking cancer to a weedkiller that Bayer acquired last
year.
Bayer is "taking that seriously and doing the things that they
need to do to be mindful of it," John Vaske, Temasek's head for the
Americas and agribusiness, said at a press conference on Tuesday.
"So, the long-term thesis that we underwrote initially remains true
today and our confidence level is high."
Temasek owns 3.7% of the chemicals and pharmaceuticals giant,
according to FactSet data.
Bayer last month established a committee of eight shareholder
and employee representatives to consult with the company's
management board and make recommendations on litigation
strategy.
The German group faces thousands of legal cases alleging a
cancer link to the glyphosate-based herbicide Roundup that used to
be sold by Monsanto, a U.S. company that Bayer bought in 2018.
Bayer's shares have fallen nearly 40% over the past year, but
Mr. Vaske said Temasek has "the benefit of looking at things on a
longer-term" basis. "I think part of the share price decline is
driven by people who don't have the luxury of that timeline and the
ability to look at the uncertainties around something like a
litigation issue and be as patient as we have the opportunity to
be."
Fitch Ratings on Monday downgraded Bayer, saying the "risk
profile of the crop science division has deteriorated during the
last year in connection with the debate surrounding
glyphosate."
The ratings agency said there was a "high degree of uncertainty"
over the litigation outcome," noting that the company lost the
first three cases that went to trial.
Shares in Bayer trade down 0.7% at EUR59.60 at 1254 GMT, having
earlier slipped to EUR58.77.
Write to Gaurav Raghuvanshi at gaurav.raghuvanshi@wsj.com
(END) Dow Jones Newswires
July 09, 2019 09:15 ET (13:15 GMT)
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