BaFin Probes Bayer's Shareholder Communication Amidst Capital Increase Rumors

Germany's BaFin is investigating Bayer's disclosure practices concerning a potential capital increase. The probe follows a 10% share price drop after Bayer announced plans to seek shareholder approval for a significant capital raise. The decision is tied to potential U.S. litigation costs.

Germany's financial markets watchdog, BaFin, has initiated an investigation into Bayer's recent disclosure practices. This move comes after Bayer's share prices saw a dramatic decline last Friday, triggered by talk of a potential capital raise.

Sources indicate that BaFin is assessing whether Bayer adhered to proper wholesale market disclosure in its shareholder communication. The healthcare and agriculture giant had proposed a 35% increase in shares to be achieved over three years to address potential U.S. litigation costs.

The proposed capital hike could total as much as 8.4 billion euros. BaFin's inquiry is centered on whether market participants were uniformly informed, amidst concerns of market manipulation or insider trading. Bayer maintains that its plans were in line with past disclosure norms.

(With inputs from agencies.)