Bayer buy!23 Aug 2023 09:42
Hi, it's only me here, but I'm worth a listen! More clues from Bayer, this time from... HR! Yes I know. But here's the deal: Serena Lin, former McKinsey partner and veteran of Elanco Animal Health was removed from post with 7 months remaining on her contract. Replaced by Heike Prinz (who I once met in Tokyo). Heike is a pureplay Pharma veteran of 37 years, now on her last job in the Company and finally on the Board (great appointment). Sarena staked her life on the notion of 'one Bayer', bringing the firm together under one happy roof and squeezing synergies. She saw billions of cost savings. But Bayer is two things: 1 = a superior immune system that resists such pressure especially from a newbie (they only like lifers), and 2 = a fantastic portfolio manager. The whole company is set up for successful M&A/carve outs/split offs/spin offs. So now the Board is 3/6 Pharma. Bill is from Roche. Stephan Oehlrich is Pharma president, and Heike HR is a Pharma lifer. The other two are Presidents of Consumer Health and Crop Science. So to my point: What about this doesn't scream 'Break Up' potential? Behind the scenes, Rodrigo president of Crop is building his internal team and bankers are all over the place in Leverkusen helping to structure a spin off of the Crop business and a sale of the Consumer Health business. CH selloff to PE will bring in 22bn, halving the debt pile. Since CS isn't performing by itself but has a super product innovation lineup to move beyond glyphosate, the investment thesis is strong, or in other words, the Company would survive by itself as a slimmer version. This just leaves PH, headquartered in Berlin, and a lot of historic real estate in Leverkusen. I know the works councils will never wear it, but Norbert and the Supervisory Committee brought Bill in, and approved Heike, for a reason. And this is it. Buy in today, and walk off with 80% profit in 18 months time. It won't be this low for long, and once it takes off, you'll never see 50c again. This is especially true since Bill killed frothy expectations of profits with his pre-earnings announcement. So now the emotion has gone and the temperature is lower, you're dealing with a diamond. Jump on board!