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Bayer shares surge as firm tackles legal woes

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Frankfurt am Main (AFP)

Shares in German chemical and pharmaceutical giant Bayer soared early Thursday, after the company's supervisory board announced moves to address a wave of US lawsuits over flagship herbicide glyphosate.

Investors sent Bayer stock shooting up 8.2 percent, to 60.60 euros ($68.90) by 10:40 am in Frankfurt (0840 GMT).

As the group faces more than 13,000 lawsuits related to the notorious weedkiller, "a newly established Supervisory Board committee will intensively monitor these topics, consult with the Board of Management and make recommendations on the litigation strategy," the company said in a statement late Wednesday.

Bayer shares remain more than 30 percent below their price a year ago.

The weak performance prompted shareholders to blast executives at the company's April general meeting over its $63 billion takeover of US-based seeds and pesticides maker Monsanto in 2018.

Some of the rise in Bayer stock Thursday could be down to hints at a change of strategy from the supervisory board.

The company has suffered several high-profile defeats in glyphosate cases, with juries awarding individual plaintiffs tens of millions of dollars.

But executives have until now stuck to their position that the weight of scientific evidence backs the chemical's safety and vowed to fight on in appeals.

In its Wednesday statement, the supervisory board said it had hired US lawyer John Beisner, highlighting his experience in both "successful defenses and settlements".

"Today's statement marks a step change in Bayer's approach," responded hedge fund Elliott, which revealed Wednesday that it holds 1.1 billion euros of Bayer stock.

Beisner "has a proven track record of delivering successful resolutions to high-profile product liability cases," the money managers added.

"Elliott's climbing aboard at Bayer gives investors new confidence that the Monsanto debacle relating to the wave of lawsuits will now be tackled more firmly by the company," CMC Markets analysts said in a note.

"Until now, one had the feeling that Bayer was only reacting to the American mass lawsuits. Now they're acting. That's what the market wants to see."

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