Activist Bluebell Said to Build Bayer Stake in Breakup Push

Bayer AG shares climbed after people with knowledge of the matter said activist investor Bluebell Capital Partners has built a stake in the company and is pushing for a breakup.

(Bloomberg) — Bayer AG shares climbed after people with knowledge of the matter said activist investor Bluebell Capital Partners has built a stake in the company and is pushing for a breakup.

Bluebell has amassed an undisclosed holding and is seeking an overhaul of Bayer’s corporate governance, according to the people, who asked not to be identified because the information is private. The stock rose 3.6% Wednesday in Frankfurt trading, giving Bayer a market value of about €55 billion ($59 billion).

The activist has been speaking to Bayer’s supervisory board behind the scenes over the past few months, the people said.

Bluebell has asked Bayer to separate its crop science business from its pharmaceutical unit, which it argues could lead to more than 70% upside for shareholders, the people said. It’s also been pressing Bayer to explore a sale or listing of its consumer-health arm, and is calling for a new independent chairman for its supervisory board, according to the people.

Chief Executive Officer Werner Baumann has been under pressure from Bayer shareholders since the company’s 2018 deal to buy crop science giant Monsanto. Activist Elliott Investment Management has previously called on Bayer to consider splitting up. On Monday, Jeff Ubben’s Inclusive Capital Partners disclosed a 0.8% stake in the German company.

Bayer’s $63 billion takeover of Monsanto quickly became a legal headache, and the company has set aside an estimated $16 billion to cover lawsuits claiming controversial weedkiller Roundup causes cancer. Amid the Monsanto litigation, Bayer’s share price has fallen by about half from its level before the deal. Baumann has insisted the company’s current configuration is the right one.

Bluebell’s Targets

A representative for Bluebell declined to comment. A spokesperson for Bayer said the company is always willing to engage constructively with stakeholders, declining to comment further.

Though small, Bluebell has made a name for itself in Europe by investing in high-profile targets like dairy producer Danone SA, where it successfully engineered the removal of CEO Emmanuel Faber.

Bluebell sometimes works with bigger funds to press for change, but not all of its campaigns have been successful. It has called for the ouster of BlackRock Inc. boss Larry Fink and demanded a shakeup at luxury-goods conglomerate Richemont, which have so far been rebuffed.

Some activist defense advisers have criticized Bluebell for pushing for changes without buying large stakes in its targets.

–With assistance from Dinesh Nair, Liana Baker and Tim Loh.

(Updates with closing share price in second paragraph.)

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