What does hedgefonds elliott plan to do at bayer??
Elliott, the hedge fund investor from the empire of u.S. Billionaire paul singer, who is known for his aggressive involvement, has made his entry into the dax company bayer public.
Elliott has a total stake of 1.1 billion euros in the leverkusen-based agricultural and chemical group, the hedge fund announced on wednesday evening. With a recent stock market value of around 54 billion euros, this is not particularly significant, but elliott’s influence should not be underestimated.
Singer is known to use aggressive methods to get his way. His funds are in danger of being used for speculation against ailing companies and states.
Whether it was the ousting of former siemens CEO klaus kleinfeld at the US company arconic or debt battles over bonds issued by crisis countries such as greece or argentina – singer has often been involved in the past few years with aggressive measures. However, his funds do not instigate shareholder revolts and lawsuits everywhere they go.
At bayer, the hedge fund initially showed its friendly side and buried the latest steps to overcome the wave of lawsuits in the USA against weed killers containing the controversial active ingredient glyphosate. Elliott said he was confident that forming a special committee was the right way to solve the problems. Bayer has already lost three court cases involving alleged cancer risks from glyphosate products from its U.S. Subsidiary monsanto. The group is with about 13.400 more lawsuits faced.
However, the last part of elliott’s statement also contains a formulation that could well be explosive. There the investor demands in the long term more net yield and also indicates, how this could be to be gotten.
"Elliott believes that the current low share price of bayer does not reflect the significant value of the individual business units or the existing value creation potential of more than 30 billion euros. What sounds cloistered may well be interpreted as a demand for a split-up of the company.
This came as little surprise, as some investors behind the scenes have apparently been pushing for a long time for the group to be broken down into its individual parts. There had already been speculation at the end of 2018 that singers hedge fund could be the driving force behind the initiative. Bayer ceo werner baumann decisively rejected a split in december. "We don’t take part in these throw-ins," he told the "borsen-zeitung" at the time. But since then, the pressure on the management board has increased further – the glyphosate rulings in the USA have put a heavy pressure on the stock price.
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