Exclusive-Bayer investor Artisan calls for break up
By Richa Naidu and Ludwig Burger
LONDON (Reuters) -Bayer is a «conglomerate» that needs to make major changes including «de-merging» two of its three business arms, investor Artisan Partners (NYSE:APAM) told Reuters on Friday, as pressure mounts on the German group's new CEO to bolster weak shares.
Artisan wants the drugs-to-pesticides company to find new owners for its over-the-counter and pharmaceutical units, it said.
«Recently we wrote a letter to the conglomerate Bayer (OTC:BAYRY) — and it is a conglomerate,» David Samra, founding portfolio manager of Artisan's International Value team, said in an interview.
Bayer has a «whole host of problems» including «too much debt,» Samra said.
Bayer's new CEO Bill Anderson said this month he is not ruling out any options as part of his review of the diversified company’s strategy and structure, «leaving no stone unturned».
He added he would provide an initial update in the coming months and detailed plans in early 2024.
Before taking the top job in June, Anderson said he was keeping an open mind on whether to break up the company, as some investors have demanded, saying other investors opposed it.
Artisan is Bayer's sixteenth biggest investor, according to Refinitiv data. It did not disclose the size of its stake.
We suggested «that they cut the dividend to zero because they need the capital to effectively operate and reinvest back in their business,» Samra said, adding that the letter was sent prior to Bayer's earnings results announcement on August 8.
«Then in their earnings release, the company specifically came out and said they're committed to their dividend which is the exact opposite of what they should be doing in the long term best interest of their business.»
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