The offer to Ascendis Health’s shareholders by a consortium headed by its CEO Carl Neethling has been shaken as its "Independent Board“ to advise shareholders on the fairness of transaction, was “reconstituted” following a complaint to the Takeover Regulation Panel (TRP).
Ascendis’ Independent director Amaresh Chetty had voluntarily and in agreement with the Takeover Regulation Panel, stepped off the Independent Board set up specifically to consider the delisting/offer to shareholders by Ascendis Health to avoid any perceived conflict of interest related solely to this transaction. Chetty remains an independent non-executive director of Ascendis.
Meanwhile, Chetty has launched legal action to sue its former chairman, Harry Smit, for alleged defamation, for comments Smit had made about the company and its directors, on the “X” social media platform, formerly known as Twitter.
Smit, who in 2022 helped lead a group of activist shareholders and won a seat on the board of the healthcare firm, said in an interview that in the first instance, he did not understand how Chetty could sue a company shareholder for R2 million, for comments he had posted on “X” about the company and the extent of the alleged independent of its directors.
Smit said shareholders were free to question and comment on the operations and governance of listed companies.
Smit said he had appointed an attorney, and had rejected an offer to mediate, and he was doing a costs discovery so that he could counter-sue for delinquency of the Ascendis board.
Smit said his complaint to the TRP about related party interests of Ascendis board members in the proposed takeover, had been proven correct by the TRP.
“A potential conflict of interest relating to one of the previous members of the Independent Board was identified, following which the Independent Board has on a voluntary basis, and in agreement with the TRP, been reconstituted to form the Reconstituted Independent Board,” Ascendis said.
Smit said the TRP, in its notice to Ascendis, had identified a number of in-concert parties to the offer, that traded in Ascendis shares, and it appeared that these parties traded with the aim of keeping the average share price low, thereby sweetening the 25% premium to the 30-day average price, that the Consortium offered to other Ascendis shareholders.
Neethling, in response to Business Report questions, said the TRP did not identify extra concert parties. Albie Cilliers, a shareholder activist, had laid a complaint of a technical nature “that we chose not to rebut because it would delay and further frustrate the process.”
“Much of the disclosure is voluntary and, most importantly, for JSE purposes these shareholders are not seen as concert parties as they have not acted in concert and have no dealings with the offering consortium in any way or form. The concert party determination is of a technical nature.
These shareholders are not seen or treated as independent shareholders for purposes of the transaction and for purposes of the JSE. he said.
Neethling said more than 81% of all shareholders had already voted in favour of the transaction and 89% of these shareholders had voted in support of the delisting.
“It is clear the vast majority of the shareholder support the delisting while the actions of Harry Smit and Albie Cilliers on matters that are immaterial and will have no bearing on the outcome of a potential transaction, have been prejudicial to shareholders,” said Neethling.
“Thanks to them, the group has had to incur unbudgeted costs and legal fees of more than R4m that is money and time that best could have been spent on growing the business for the shareholders,” said Neethling.
Smit said one of the allegations he was being sued for was because Chetty believed he was being falsely accused of not being independent, but in Monday’s announcement by Ascendis, Chetty was shown to not be independent.
Smit said the TRP had identified a number of instances where Ascendis directors, or others acting in-concert, had traded in the shares and no announcements had been made to the JSE. This effectively amounted to insider trading, he said.
Ascendis said in its notice Monday, that they had now undertaken a “rigorous review process of the Register to determine whether any other shareholders who, as a result of their relationship to a member of the Consortium, would also be presumed or regarded to be acting in concert with the Consortium.”
Meanwhile, in a trading statement for the six months ended December 3, the firm said yesterday earnings per share from continuing operations would be between 9.2 cents and 11.2 cents, compared to the loss per share from continuing operations of 29.4 cents reported for the prior corresponding period.
Headline earnings per share from continuing operations would be between 9.2 cents and 11.2 cents, compared to the headline loss per share from continuing operations of 29.4 cents reported for the prior corresponding period.
The interim results were likely to be published on March 28.
BUSINESS REPORT