AgroPages-Bayer's largest institutional investor backing company's management, strategy-Agricultural news

Dow Jones reports:

Bayer AG's (BAYN.XE) biggest institutional investor, Temasek Holdings, says it is encouraged by the German company's engagement of its supervisory board and management team to monitor litigation linking cancer to a weedkiller that Bayer acquired last year.

Bayer is "taking that seriously and doing the things that they need to do to be mindful of it," John Vaske, Temasek's head for the Americas and agribusiness, said at a press conference on Tuesday. "So, the long-term thesis that we underwrote initially remains true today and our confidence level is high."

Temasek owns 3.7% of the chemicals and pharmaceuticals giant, according to FactSet data.

Bayer last month established a committee of eight shareholder and employee representatives to consult with the company's management board and make recommendations on litigation strategy.

The German group faces thousands of legal cases alleging a cancer link to the glyphosate-based herbicide Roundup that used to be sold by Monsanto, a U.S. company that Bayer bought in 2018.

Bayer's shares have fallen nearly 40% over the past year, but Mr. Vaske said Temasek has "the benefit of looking at things on a longer-term" basis. "I think part of the share price decline is driven by people who don't have the luxury of that timeline and the ability to look at the uncertainties around something like a litigation issue and be as patient as we have the opportunity to be."

Fitch Ratings on Monday downgraded Bayer, saying the "risk profile of the crop science division has deteriorated during the last year in connection with the debate surrounding glyphosate."

The ratings agency said there was a "high degree of uncertainty" over the litigation outcome," noting that the company lost the first three cases that went to trial.