Bayer Seeks Investor Approval for 35% Cash Call to Gird for Litigation
Bayer will seek shareholder approval to raise equity capital worth close to 35% of its outstanding shares over the next three years to cover possible costs of U.S. litigation, it said on Friday, knocking its shares lower. The potential capital increase, worth up to 8.4 billion euros ($9.1 billion) based on the company's current market value, will be voted on at the annual general meeting on April 25. Should investors give approval, Bayer will only resort to a rights issue "if it is absolutely necessary," it said in a statement on its website.
- The magnitude of this potential cash call highlights the intense legal and financial pressure that Bayer faces in defending its products against increasingly hostile claims.
- What will be the long-term implications for shareholder value if Bayer is ultimately forced to significantly increase its capital base due to continued litigation costs?