Bayer's Monsanto approach sparks shareholder uproar

Fri May 20, 2016 12:51pm EDT
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By Simon Jessop and Ludwig Burger

LONDON/FRANKFURT (Reuters) - Bayer's (BAYGn.DE: Quote) takeover approach for U.S. rival Monsanto (MON.N: Quote) triggered an investor backlash on Friday, with one of the German pesticides and drugs company's major shareholders calling it "arrogant empire-building".

Investors are nursing losses after an 8.2 percent fall in Bayer's share price following news of its bid, which John Bennett of Henderson Global Investors, described as an "immediate destruction" of shareholder value.

U.S. seeds group Monsanto on Thursday said Bayer, led by recently appointed Chief Executive Werner Baumann, had made an unsolicited takeover proposal to create the world's biggest agricultural supplier.

Bennett, in emailed comments to Reuters, said he was furious that Bayer had not engaged with him over the approach. He said that the "fine work" of Baumann's predecessor Marijn Dekkers had been "ripped up".

A Bayer spokesman declined to comment, pointing only to the company's statement on Thursday that it would make further statements as appropriate.

As CEO, Dekkers had initiated a separation of Bayer's foam chemicals and transparent plastics business, Covestro, focusing Bayer on human, animal and plant health.

"I had hoped that the days of such arrogant empire-building and ignorance of the actual owners of the business were at an end," Bennett said.

Bennett's comments mark the most scathing attack yet on Bayer in a chorus of investor discontent mainly over the sheer size of the proposed deal.   Continued...

Monsanto is displayed on a screen where the stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. on May 9, 2016. REUTERS/Brendan McDermid/File Photo