** A $10 billion slump in Bayer's market value on Tuesday gives the stock room to partially recover, Citi analysts said on Tuesday, citing a legal expert as saying that damages subsidiary Monsanto was ordered to pay could be significantly reduced
** Newly acquired Monsanto was ordered to pay $289 million in damages, $250 million of which in punitive damages, in the first of possibly thousands of U.S. lawsuits over alleged links between weedkiller Roundup and cancer
** The appeal process could take one to three years with punitive damages likely significantly reduced, and a 30 percent probability of compensatory damages also reduced, Citi said in a note, citing an unnamed legal expert's estimates
** Citi cited the expert as saying a class settlement is the most likely outcome once 5-10 verdicts have been reached. Such agreements usually target "20 cents on the dollar damages awarded" and a class settlement would likely be in the $1 billion to $2 billion range.
** Insurance is likely in place to cover defence fees, compensatory damages and a settlement contribution, but not punitive damages, according to the note. Bayer declined to comment on any legal insurance
** The analysts cautioned that shareholder litigation could be looming, accusing Bayer of fraud and misrepresenting Monsanto risks
** "While we see scope for the shares to partially recover, we see a significant rerating as difficult in the absence of improvements in the (agriculture) outlook, (drug) pipeline prospects, and earnings upgrades," Citi said. ($1 = 0.8780 euros)