By Ludwig Burger
Frankfurt (Reuters) -Germany’s Financial Markets Watchdog started a first probe to investigate whether Bayer plans reasonably revealed to get approval from the shareholders for a potential capital increase, a legal source told Reuters on Tuesday.
Under the “routine” study activated by the strong decrease in Bayer’s share price last Friday, Waakhond Bafin checks whether there are grounds for a broader investigation, the person who is familiar with the matter to Reuters told Reuters.
The Healthcare and Agriculture Group said in a statement on Friday that it would ask the approval of the shareholders to possibly increase the outstanding shares of almost 35% in the next three years to cover possible costs of American court cases.
The potential capital increase is worth 8.4 billion euros ($ 9.1 billion) on Friday based on the market value of the company on Friday.
The share fell by no less than 10% in Intraday trade on Friday with investors who would spread Balking Balking from a cash call because dividends would spread over more shares. Reuters has reported that Bayer told different analysts in detail the plans the day before.
De Source said that Bafin looked at both a market -moving potential of the proposal for the annual investor meeting on 25 April and whether this was announced wide enough to reach all market participants.
When asked to comment, Bafin said that “regularly acts on unusual share price movements to determine whether there are indications for market manipulation, trade with prior knowledge and/or violations of rules for ad-hoc designing”. It would not give specific comments on Bayer.
A Bayer spokesperson pointed out earlier comments and said that the proposal is in accordance with earlier shareholders authorization for a capital increase of 35% that was until 2019. At the time, Bayer also had conditional capital of 10% at his disposal, he added.
The spokesperson also pointed to a presentation that chairman Norbert Winkeljohann gave in January, which showed that Bayer is considering a mood about increasing new shares, without specifying the size.
Analysts had told Reuters last year that Bayer may have to ask shareholders to strengthen capital to strengthen his finances, even after the German group had reduced its dividends.
Not for mergers and acquisitions
CEO Bill Anderson has dragged to revive a share price that is taxed by an expensive American lawsuit, a setback of the development of medicines for medicines, weak agricultural markets and more than 32 billion euros in debts.
Bafin rules require that listed companies distribute information with the potential to move a share price “to the widest possible audience on a non-discriminatory basis”.
