UPDATE 2-Bayer seeks glyphosate litigation advice as Elliott reveals stake * Bayer directors to form committee to discuss litigation
* Bayer says lawyer has been appointed to advise directors
* Activist shareholder Elliott says holds shares worth 1.1
bln eur
* Elliott says Bayer could unlock 30 bln euros in value
(Adds statement from Elliott about Bayer's potential for
unlocking value, additional detail from sources)
FRANKFURT, June 26 (Reuters) - Chemicals giant Bayer
<BAYGn.DE>, under pressure from activist shareholders, said on
Wednesday it has hired an external lawyer to advise its
supervisory board and has set up a committee to help resolve a
multi-billion dollar glyphosate litigation issue.
Bayer has seen its share price tumble in the wake of its $63
billion acquisition of Monsanto, which brought with it massive
legal issues after more than 13,400 plaintiffs alleged the
company's glyphosate weedkiller caused cancer.[nL2N2361L0]
Bayer, which acquired Monsanto last year, says studies and
regulators have deemed glyphosate and Monsanto's Roundup
weedkiller safe for human use, but the German company has
struggled to contain the reputational and legal fallout.
German Chancellor Angela Merkel said on Wednesday that
German farmers would stop using glyphosate eventually, a stance
which is at odds with the Leverkusen-based company's view.
[nL8N23X3II]
Activist shareholder Elliott Associates said it welcomed
Bayer's new steps to improve supervision of litigation issues,
as it revealed for the first time its holding of Bayer shares.
Bayer said it has hired U.S. lawyer John H. Beisner from
Skadden, Arps, Slate Meagher & Flom LLP to advise the
Supervisory Board on matters related to the glyphosate
litigations, including trial tactics and mediation.
"His appointment is intended to add fresh and independent
perspectives to the advice given to the Board of Management,"
Bayer said in a statement.
"We are convinced that with his expertise, John H. Beisner
will provide very valuable and concrete advice on the ongoing
litigation as well as the mediation," Bayer's Chairman Werner
Wenning, said in the statement.
Bayer also said a new Supervisory Board committee, comprised
of eight supervisory board members, will consult with the Board
of Management and make recommendations on litigation strategy.
The company appears to have changed its approach to
litigation, from taking a "we will prevail, we will fight to the
end" attitude to seeking a settlement more quickly as a way to
reassure investors and employees, a person familiar with the
discussion told Reuters on Wednesday.
Elliott Associates revealed that it holds Bayer shares and
financial instruments equivalent to 1.1 billion euros ($1.3
billion) worth of Bayer stock. Bayer's market value is 52.2
billion euros.
It is the first time that Elliott has acknowledged holding a
significant stake in the German company. Reuters last year
reported that Elliott had amassed a stake of under 3%, citing
people familiar with the matter. [nL8N1YC4RY]
Elliott has a stake equivalent to 2.1% of Bayer shares, a
source familiar with the matter said on Wednesday.
"Elliott welcomes these steps, and is confident that today’s
statement marks a step change in Bayer’s approach to addressing
the legal challenges currently facing the company," Elliott said
in a separate statement.
Elliott said it believes that the creation of the special
committee will provide a new level of oversight and a fresh
perspective to a litigation strategy, which it said needs a
radical overhaul.
Elliott also said Bayer could do more to maximise long-term
value for all its stakeholders, saying the company had an
opportunity to unlock more than 30 billion euros in value.
"Elliott looks forward to the company building upon today's
announcement, and making a credible commitment to the
exploration of long-term value creative levers beyond the
immediate litigation and governance enhancements," it said.
Elliott wants Bayer to resolve its litigation issues as an
immediate priority and is not pushing the company to pursue
deeper structural changes right away, the source said.
($1 = 0.8789 euros)
(Reporting by Edward Taylor and Arno Schuetze
Editing by Tassilo Hummel, Edward Taylor and Susan Fenton)
((Edward.Taylor@thomsonreuters.com; +49 69 7565 1187)