Bayer To Divest 3.6% Stake To Singapore Company Temasek
Zacks Investment Research | Apr 18, 2018 06:58AM ET
Bayer AG (DE:BAYGN) (OTC:BAYRY) will divest its 3.6% stake to Singapore's state investment company Temasekfor total gross proceeds of €3 billion. Along with its existing holding in Bayer, Temasek will own about 4% in Bayer after the transaction. Bayer has announced the deal toward its planned $66 billion takeover of Monsanto (NYSE:MON) .
Per the deal, Bayer will issue to a subsidiary of Temasek at an at-market price the new registered (no-par value) shares with an entitlement to dividends as of Jan 1, 2017.
Bayer stated that the proceeds from the placement would be taken into account when settling the size of the previously announced rights issue to fund the Monsanto takeover. Shares issued to Temasek will not be subject to any lock-up period.
This investment is in sync with Bayer’s business strategy including the proposed acquisition of Monsanto, as well as Bayer’s strong growth prospects.
Shares of Bayer have returned 12.1% compared with the industry ’s gain of 8.8% over a year.
We remind investors that in October 2017, Bayer signed an agreement to sell selected Crop Science businesses to BASF for €5.9 billion, in light of the planned acquisition of Monsanto Company. The Brazilian antitrust authorities approved the acquisition. The company also committed to divest its entire vegetable seed business. Certain additional business activities of Bayer and Monsanto may also be sold or out-licensed.
The latest transaction is subject to regulatory approval as well as the successful closing of Bayer’s acquisition of Monsanto. Meanwhile, Bayer will continue to own, operate and maintain these businesses until the closing of this divestiture.
Zacks Rank and Stocks to Consider
Bayer carries a Zacks Rank #4 (Sell).
A few better-ranked stocks from the same space worth considering are Ligand Pharmaceuticals (NASDAQ:LGND) andProtagonist Therapeutics (NASDAQ:PTGX) . Both of them sport a Zacks Rank #1 (Strong Buy).You can see .
Ligand’s earnings per share estimates have moved up $3.78 to $4.40 from $4.75 to $5.32 for 2018 and 2019, respectively, over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company’s shares have rallied 62.8% over a year.
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Protagonist’s loss estimates narrowed from $1.30 to 66 cents for 2018 and from $1.99 to $1.26 for 2019, over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.95%.
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