Bayer soars on report of proposed $8 billion roundup settlement

Company's shares have lost more than a third in market value since August last year

Bayer's chief executive said the company would consider settling with US plaintiffs only on reasonable terms. Reuters

Bayer shares soared as much as 11 per cent on Friday on a report that the German company has proposed to pay up to $8 billion to settle more than 18,000 US lawsuits related to its weedkiller Roundup.

The stock was on track for its best single-day gain in a decade as traders said the settlement report from Bloomberg could relieve pressure on Bayer shares.

Bayer, which acquired Roundup and other glyphosate-based weedkillers as part of its $63bn takeover of Monsanto last year, declined to comment.

Bayer shares have lost more than a third, or roughly $34bn, in market value since August last year, when a California jury in the first such lawsuit found that Monsanto should have warned of the alleged cancer risks from Roundup.

The German drugs and pesticides company has engaged in negotiations with plaintiffs' lawyers, said a person familiar with the matter.

Bayer said this week that the next US glyphosate lawsuit scheduled to be heard in St. Louis, Missouri, would likely be postponed and the company added on Friday that the following St. Louis case slated for September had been postponed.

Bloomberg said the delays had been pursued by Bayer to allow for undisturbed settlement talks.

Bayer's chief executive Werner Baumann last week said the company would consider settling with US plaintiffs only on reasonable terms, and if it "achieves finality of the overall litigation".

The company, which says regulators and extensive research have found glyphosate to be safe, has previously said it was banking on US appeals courts to reverse or tone down three initial court rulings that have so far awarded tens of millions of dollars to each plaintiff.

Bloomberg cited three sources familiar with the discussions as saying that Bayer's lawyers are seeking an accord to resolve all current and future cases. Talks over cases that have yet to be filed were particularly tricky, the report added.

While Bayer has indicated it could pay $6bn to $8bn, plaintiffs' lawyers want more than $10bn to drop their claims, the report said.

"Progress on settlement is a clear positive to potentially remove what has been the key overhang in shares [of Bayer's] for a year," Bank of America analysts said in note.

An estimate of a $20bn hit from the litigation has previously been reflected in the share price, they added.