Ascendis Health has achieved a significant legal win after seeking judicial review to overturn a ruling by the Takeover Regulation Panel (TRP). This marks a pivotal moment in a saga that began in September of last year, when Ascendis announced its potential delisting from the Johannesburg Stock Exchange (JSE).
In a cautionary statement to shareholders, Ascendis revealed it had “initiated a process to investigate and progress a potential delisting of Ascendis from the JSE.” The company framed this step as a strategic move to unlock value and return capital to its shareholders.
Ascendis also disclosed that it had entered discussions with a consortium led by ACN Capital IHC, which is owned and controlled by Ascendis Health CEO Chris Neethling. In November 2023, the consortium sent a letter to the Ascendis board expressing its intention to acquire the company’s ordinary shares from shareholders who preferred to exit their investments. The exit offer, priced at 80 cents per share, aimed to take the company private, valuing Ascendis Health at R500 million.
The consortium includes:
- ACN Capital, headed by Chris Neethling.
- Carl Andre Capital, where Neethling is a director.
- Dendrobium Capital, also under Neethling’s directorship.
- Emfam Belleggins.
- Kingston Kapitaal, with Neethling as a director.
- JVDM Trust.
In April 2024, the TRP announced it had received complaints under Section 169 of the Companies Act concerning the takeover. These complaints alleged that certain shareholders, due to their relationship with a consortium member, were acting in concert with the consortium. Additional allegations of non-compliance were also raised. Since the offer was announced, the TRP received approximately 20 complaints.
On 19 June 2024, Ascendis Health released a SENS announcement stating that the TRP had found the consortium in contravention of specific Takeover Provisions. The panel mandated the consortium to amend its firm intention announcement and circular in the Exit Offer to fully disclose their concert party relationships to all Ascendis Health shareholders.
Disagreeing with the TRP’s findings, Ascendis and the consortium explored their legal options. They urgently applied to the High Court to review and overturn the TRP’s ruling and the related compliance notice. On 15 July, the High Court ruled in favour of Ascendis, setting aside the TRP’s decision and compliance notice on grounds of “lack of procedural fairness.” The High Court has remitted the matter back to the TRP for reconsideration.
This court ruling represents a crucial victory for Ascendis Health as it continues to navigate the complexities of its potential delisting and takeover processes.
Main Image: MSN
