Regulator to investigate allegations about Ascendis’ delisting offer

Regulator to investigate allegations about Ascendis’ delisting offer

The Takeover Regulation Panel (TRP) said on Friday that it would launch an investigation into Ascendis Health, following complaints it has received about alleged irregularities in Ascendis’ management buyout of its minority shareholders.

The TRP’s responsibilities include investigating complaints regarding affected transactions and offers to shareholders, to ensure the integrity of the marketplace and fairness to shareholders of listed companies.

The TRP said on Friday they had received complaints regarding other shareholders who, “as a result of their relationship with a member of the consortium, are alleged to be acting in concert with the consortium, as well as allegations relating to other instances of non-compliance”.

Ascendis’ management said on Friday they welcomed the announcement by the TRP, which had been made by the TRP in consultation with Ascendis, because the medical devices and vitamin product group believed it would prevent further “abuses of regulatory processes that are hindering the implementation of the transaction”.

Ascendis CEO Carl Neethling’s investment firm had put up a R250 million guarantee to buy out shareholders in an offer of 80c a share, to delist and take the firm private. The price was at an almost 16% premium on the price when the potential delisting was first announced in September last year.

The company’s management said on Friday that they “firmly believe the transaction is in the interests of Ascendis shareholders and all other stakeholders, and which we are very hopeful will be approved by shareholders at the upcoming shareholders’ meeting on 23 April”.

Business Report has over the past few weeks reported on some of the complaints. Ascendis former chairman Harry Smit, who is also being sued by an Ascendis director for defamation, has claimed the offer by the consortium headed by Neethling was pitched too low, as Smit alleged the consortium had take steps to keep Ascendis’ share price low prior to their offer.

Smit has also alleged there has been insider trading by parties acting in concert with the takeover consortium.

Smit said Friday it was “hats off to the TRP” for “stepping up to the plate for a second time” on Ascendis. Smit said he intended to raise more issues with the TRP than he had brought up earlier this year, to form part of the investigation.

Last week, Black Mountain Investment Management hedge fund manager Mohammed Dhorat labelled the plans to delist as “corporate fraud” and the fund manager called for the shareholder meeting on April 23 to be suspended so that “all concert parties as highlighted in the documentary evidence are sterilised ahead of any vote for the delisting”.

The TRP said on Friday that since the announcement of the offer documents, it had received about 20 complaints.

“While not all of them, a considerable number of these complaints have resulted in remedial action being taken,” the TRP said, referring to an initial intervention it took following complaints to it earlier about the offer.

The TRP said some of the complainants included former prescribed officers of Ascendis.

“Given the circumstances outlined above, the panel has decided to take proactive measures to ensure that all complaints related to matters preceding this announcement are processed in a systematic and organised manner (Investigation). This approach will help to avoid any undue delays in finalising the offer,” it said.

An inspector had been appointed to investigate complaints and then report to the deputy executive director of the TRP on the outcome. Interested parties were invited to make submissions, within 10 calendar days, starting from April 19.

Impugned parties – in the complaints to be lodged – would be afforded 20 business days to respond to the complaints.

A report by financial advisory firm BDO in February found the Ascendis’ offer to be fair. The share price traded Friday, but ended static at 80 cents on Friday. Five years ago the share price was R4.10.

BUSINESS REPORT