Shareholders criticize the group’s performance, although it recently showed operational strength.
(Photo: dpa)
Dusseldorf One of Bayer’s largest shareholders, the state fund Temasek from Singapore, is apparently pushing for CEO Werner Baumann to be dismissed. Temasek representatives had clearly criticized the Bayer management to the head of the supervisory board, Norbert Winkeljohann, according to financial circles on Sunday.
After that, Temasek calls for a new appointment to the top management and wants to increase the pressure on Bayer before the annual general meeting at the end of April. According to a report by the Bloomberg news agency, one option would be a vote of no confidence or a refusal to approve the actions of the board at the shareholders’ meeting. Bloomberg cites people “familiar with the matter” as the source.
Bayer did not want to comment on Sunday and only announced that Temasek had “no corresponding counter-motion that could be published” for the discharge of the board of directors. Another shareholder, the fund company Alatus Capital, has already submitted such a counter-motion and announced non-discharge.
But Temasek has more weight. With a stake of four percent, the state fund is one of the largest shareholders in Bayer AG.
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The move comes as a surprise: Temasek has repeatedly backed Bayer’s strategy in recent years and described the investment with an investment horizon of decades. For example, Temasek CEO Chong Lee Tan said in 2019 that for the sovereign wealth fund, the company’s “underlying performance remains strong.”
Financial circles are puzzling over the advance of the sovereign wealth fund
It is clear that Temasek is still in the red with his investment in Bayer. The sovereign wealth fund increased its stake in 2018 at a time when the share was trading between 80 and 90 euros. In the meantime, the price has fallen to 45 euros. However, Bayer has been one of the strongest stocks in the Dax for a few weeks and is currently trading at 61 euros.
Read more about Bayer
In financial circles, it is therefore puzzling why Temasek is now launching such an attack on the Bayer management. Because the Leverkusen group showed operational strength again in 2021 and exceeded its own forecasts. Bayer has now also found a solution to the onerous legal disputes arising from the glyphosate lawsuits.
Shareholder protector Marc Tüngler from the German Association for the Protection of Securities (DSW) called the Temasek initiative “absurd theater – in terms of content and timing”. The attack came at the wrong time and two to three years too late. Tüngler represents thousands of small Bayer shareholders.
In 2019, the shareholders withdrew their confidence in the Bayer management at the annual general meeting and did not approve the actions of the board of directors – it was a sign of displeasure about the loss in value after the takeover of Monsanto and the wave of glyphosate lawsuits and a warning to CEO Baumann. In 2020 and 2021, however, the board of directors again received high approval ratings at the shareholder meetings.
The Leverkusen group has a problem with its largest shareholder.
(Photo: dpa)
“Now, in a phase in which Bayer is gaining a foothold again and is in an upward trend, such an attack alone can cause damage,” Tüngler commented on Temasek’s advance. In recent years, the DSW boss has himself sharply criticized Bayer management for the massive loss in value after the purchase of Monsanto.
“Stylish and unacceptable” – politicians criticize attack
Politicians were appalled by Temasek’s actions on Sunday. “War in Europe, global food crisis, and a sovereign wealth fund attacks a systemically important company: This will meet with resistance from politicians!” said Dennis Radtke, who sits in the European Parliament as an industry expert for the CDU.
Radtke is alluding to Bayer’s role as a manufacturer of important agricultural goods. The Leverkusen company is the world’s largest supplier of seeds for agriculture and crop protection products. Bayer is particularly challenged by the war in Ukraine because there is a risk of famine in many regions of the world.
The reason is the loss of wheat deliveries from Russia and Ukraine to countries in Africa, for example, that are dependent on these two export nations. Farmers and their suppliers in unaffected Western countries should now find solutions to fill this gap. Bayer is therefore in demand as a supplier of agricultural raw materials.
“In these times such an attack. Quiet and unacceptable,” criticized the chairman of the Economic Committee of the German Bundestag, Michael Grosse-Brömer (CDU), on Sunday in the direction of Temasek. Politicians fear that Bayer could be weakened by disputes with shareholders in the current emergency situation on the agricultural market.
Some investors are in favor of splitting up the chemical and pharmaceutical company to boost the share price. Whether Temasek also demands this is an open question. The state fund criticized the performance of the group and the succession planning for Baumann to the supervisory board. The CEO still has a contract until May 2024.
More: Bayer wants to show strength in 2022: profit should increase to twelve billion euros