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Ascendis Health Delisting Drama: Leaked Valuation Sparks Investor Outrage

Published February 01, 2024
10 months ago

The Johannesburg Stock Exchange-listed company, Ascendis Health, is currently embroiled in a major controversy. A leaked presentation has ignited a firestorm among investors, who have accused CEO Chris Neethling and other key stakeholders of engaging in underhanded practices during the company’s delisting process.


Ascendis Health has been considering a delisting from the JSE since September 2023. The rationale behind this move is to "unlock value and return capital to shareholders," according to a cautionary announcement by the company. This process took a contentious turn when the Acendis Health-branded presentation surfaced on social media platform X, revealing unsettling details regarding the company’s valuation and the proposed buyout offers.


At the core of this uproar is a discrepancy in valuation. The leaked presentation suggests that Ascendis Health is internally valued at R1.1 billion, a stark contrast to the R500 million valuation indicated by the 80 cents per share buyout offer extended to shareholders. The offer comes from a consortium led by Neethling’s ACN Capital IHC (Pty) Limited, presenting a clear conflict of interest wherein Neethling's dual role as CEO and buyer could potentially clash with shareholder interests.


The perturbed sentiment among shareholders arises from the possibility that the delisting might see them missing out on future gains from the company’s assets, valued much higher than what they would receive in the buyout. The presentation specifies that more than R500 million is expected to be recuperated within a year post-buyout. One business unit, Ascendis Consumer Brands, reportedly already has a buyer at R320 million, a significant portion of the overall valuation. With seven other businesses allegedly valued at R730 million, shareholders are now questioning the fairness of the buyout price.


Following the backlash, Ascendis Health publicly refuted the document via a SENS announcement, distancing the company from the presentation. The board emphasized the "numerous factual inaccuracies" and the alleged lack of reality reflected in the document. Ascendis highlighted the importance of relying on officially sanctioned company communications, especially those published on SENS, its website, or other official channels.


Neethling, in a statement to the Daily Investor, acknowledged the controversy and assured that the company is preparing a detailed response to factually counter the misleading details within the presentation. He maintained that the document does not represent the company's standing or realities.


Amid all these back-and-forths, affected shareholders are left to decipher the true value of their investment and the integrity of the delisting process. The Ascendis Health saga underscores the importance of transparent and equitable practices in corporate transactions, especially when they involve significant changes like delisting from a public exchange where fiduciary duties to shareholder interests must be paramount.


With the company’s response pending, stakeholders are looking forward to clarifications and reassurances regarding their interests and the future of Ascendis Health. The leak, whether erroneous or not, has highlighted critical flaws in the communication between the company’s management and its shareholders, spawning a wider debate about corporate governance and investor relations in the South African context.



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