Ascendis Health fights back
Ascendis Health scored a significant legal victory after applying to the High Court to review and set aside a ruling by the Takeover Regulation Panel (TRP).
This is the latest development in a saga that started in September last year when Ascendis announced that it is considering delisting from the JSE.
In a cautionary announcement, the company informed shareholders that it had “initiated a process to investigate and progress a potential delisting of Ascendis from the JSE”.
It described this move as the next step in its strategy to unlock value and return capital to Ascendis shareholders.
Furthermore, the company announced that it has entered into discussions with a consortium led by ACN Capital IHC, owned and controlled by Ascendis Health CEO Chris Neethling.
In November 2023, the consortium sent a letter to the Ascendis board confirming its intention to acquire the company’s ordinary shares from shareholders who do not wish to remain invested.
The exit offer was extended to all Ascendis shareholders looking to divest their interests as part of the delisting for a cash consideration of 80 cents per share.
The 80 cents per share that current investors will receive in taking the company private would value Ascendis Health at R500 million.
The consortium consists of the following entities:
- ACN Capital, headed by Neethling.
- Carl Andre Capital, of which Neethling is a director.
- Dendrobium Capital, of which Neethling is a director.
- Emfam Belleggins.
- Kingston Kapitaal, of which Neethling is a director.
- JVDM Trust.
In April 2024, the TRP announced that it had received complaints about this takeover under Section 169 of the Companies Act.
The complaints concerned other shareholders who, because of their relationship with a member of the consortium, are alleged to be acting in concert with the consortium.
There were also other allegations relating to instances of non-compliance.
The TRP said that it has received approximately 20 complaints since announcing the offer described in the offer documents.
In a SENS announcement released on 19 June 2024, Ascendis Health informed shareholders that the TRP issued a ruling finding the consortium to have contravened certain provisions of the Takeover Provisions.
The panel also required the consortium to supplement both its firm intention announcement and circular in the Exit Offer to fully disclose their concert party relationship to all Ascendis Health shareholders.
Ascendis and the consortium said they strongly disagree with the panel’s findings and are assessing their legal options to oppose them in the appropriate forum.
Following legal advice, Ascendis and the consortium made an application to the High Court on an urgent basis to review and set aside the TRP’s Ruling and the subsequent compliance notice the panel issued.
It said that, on 15 July, the High Court made an order reviewing and setting aside the TRP’s ruling and the compliance notice on the basis that the panel’s findings were “unlawful for lack of procedural fairness”.
Ascendis said the High Court has remitted the matter to the TRP.
Comments