LONDON: Bayer's takeover approach for US rival Monsanto triggered an investor backlash on Friday, with one of the German pesticides and drugs company's top shareholders calling it "arrogant empire-building".
Investors are nursing losses after an 8.2 percent fall in Bayer's share price following news of its bid, which John Bennett of Henderson Global Investors, described as an "immediate destruction" of shareholder value.
US seeds giant Monsanto on Thursday said Bayer had made an unsolicited takeover proposal in a bid to create the world's biggest agricultural supplier.
Bayer's shares rebounded slightly on Friday and were up 1.3 percent at 1329 GMT, slightly outperforming a 1.1 percent gain in the broader DAX index.
Bennett, in emailed comments to Reuters, said he was "furious" that Bayer had not engaged with him over the approach, adding the "fine work" of recently appointed Chief Executive Werner Baumann's predecessor had been "ripped up". Bayer made no immediate comment on the investor response.
Former CEO Marijn Dekkers had initiated a separation of Bayer's foam chemicals and transparent plastics business, Covestro, focusing Bayer on human, animal and plant health.
"I had hoped that the days of such arrogant empire-building and ignorance of the actual owners of the business were at an end," Bennett added. Bennett's comments mark the most scathing attack yet on Bayer in a chorus of investor discontent mainly targeted at the sheer size of the proposed deal.
Frankfurt-based Union Investment fund manager Markus Manns said he was "sceptical" of the merits of the takeover, in a phone interview with Reuters on Friday.
While he saw strategic value in adding a large seeds business to Bayer's crop chemicals unit, the size of the deal would stretch Bayer's finances too much, he said.
"With a presumptive premium of 30 to 40 percent it would be quite a chunk," Manns said, when based on the assumption of an undisturbed share price of $90.
His comments follow a similarly concerned response from UBS GAM fund manager Maximillian Anderl on Thursday, who said he would prefer to see a joint venture or nil-premium merger.
Berenberg analyst Alistair Campbell, meanwhile, said that while Monsanto was not an entirely illogical deal given the broader scope of Bayer's strategy, the German company could have bitten off too much.
"It's just a very (very) large deal," he wrote in a note to clients. "We have struggled to find investors who favour this transaction," he added.
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