Bayer has decided to extend its $21.2 billion takeover offer for fellow German drugmaker Schering until June 14, after so far getting hold of only 30% of Schering's capital through tenders or pledges, well short of the 75% Bayer specified under the terms of the offer.

The news sparked a 1% drop in Bayer’s share price this morning to 34.70 euros, although analysts said that there is no reason to suggest the takeover will fail yet, as funds often wait until the last hours before tendering their shares

Under German law, Bayer cannot make any further changes to the takeover offer, which includes changing the minimum acceptance threshold, the offer price or the acceptance period, without Schering’s agreement.

A report in the Financial Times suggested that the move was designed to discourage fund managers from betting that Bayer would lower the tender threshold below 75%. This could allow them to set aside more shares for inclusion in any settlement agreed after the transaction closes. Under German law, shareholders reluctant to part with their holdings can be eligible for compensation payments.

Since Bayer made its take over offer, it has received unconditional approvals from the European Commission and the US antitrust authorities and the firm said is confident it will meet the threshold by the new deadline.

Reinforcing that view, the company also announced yesterday that Allianz AG, which holds 11.4% of shares and is thus Schering's largest stockholder, has publicly announced its intention to accept the offer.