Bayer Gains as Investor Temasek Calls for CEO Baumann’s Ouster

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Bayer Gains as Investor Temasek Calls for CEO Baumann’s Ouster
Credit: © Reuters.

By Dhirendra Tripathi – Bayer (DE: BAYGN ) stock traded 2.7% higher Monday in Frankfurt after reports that Singapore’s Temasek, a long-term investor, is calling for the removal of Chief Executive Officer Werner Baumann.

Temasek has had longstanding concerns about Bayer’s operating performance under Baumann and the company’s lack of succession planning, grievances the state investor has communicated to the company, Bloomberg said.

According to the report, among the options Temasek is considering ahead of the shareholder meeting next month are requesting a no-confidence vote in Baumann or voting against ratifying the performance of the management. Either step would significantly raise pressure on Bayer’s board to rejig the leadership.

Temasek’s activist-type approach is rare for the firm. It built a roughly 4% stake in the German company in 2018, helping Bayer (OTC: BAYRY ) complete the controversial $63 billion takeover of Monsanto (NYSE: MON ). The deal, championed by Baumann, has cost the company billions of dollars in litigation amid charges that Monsanto’s product Roundup causes cancer.

Swiss investor Alatus has already objected to ratifying the performance of Baumann and his management team at Bayer’s April 29 meeting, pointing to a significant loss in market value during his tenure. Bayer shares have lost 39% since the Monsanto deal closed but are up 29% so far this year, according to Bloomberg.

Alatus, whose letter has been posted on Bayer’s website, said the company has failed to lay out a strategy that produces long-term growth for the crop science and pharmaceutical divisions. It also called for allowing shareholders to vote on members of Bayer’s management team individually at the meeting, rather than collectively.

Investor frustration with leadership could also trigger Bayer to revisit calls to break itself up into agriculture, pharmaceutical, and consumer healthcare units.

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