Activist shareholders kick Ascendis CEO back to London
No surprise as hands-off Danish CEO Thomas Thomsen is fired after failing to arrest the falling share price
Shares in Ascendis Health fell as much as 10.2% on Friday after the troubled maker of Bettaway vitamins said it had parted ways with its CEO of less than 14 months, Thomas Thomsen.
The stock recovered to close at R4.93c, giving the company a market capitilisation of R2.2bn.
“The fact that Thomsen has been bulleted as CEO doesn’t come as a surprise,” said independent analyst Anthony Clark.
Chairperson Andrew Marshall, who has led fishing group Oceana and packaging giant Nampak, and who joined Ascendis earlier in May, was appointed acting CEO, Ascendis said.
On May 3, Ascendis said it had appointed Marshall and Phil Roux, the former CEO of Pioneer Foods, to its board.
The board changes came after a demand in late April by two significant shareholders – Mergence Investment Managers and Acanthin Capital – to convene a general meeting to nominate new non-executive directors to the board.
The addition of Marshall and Roux to the board showed that activist shareholders had demanded major changes, Clark said. “Given that Thomsen was based in London, but most of the problems were emanating from SA, he was probably an ineffectual CEO … his termination was probably inevitable.”
Marshall’s appointment as acting CEO “should appease the market and bring some stability back,” Clark said. “It will hopefully lead to a period of consolidation, debt reduction and asset sales.”
A Danish national, Thomsen took over in March 2018 but failed to arrest the decline of Ascendis’s share price, which has been dragged lower by debt concerns and forced selling on the part of a major shareholder. The group’s shares have plunged from a high of R28.97 in September 2016.
Ascendis’s private equity backer, Coast2Coast, sold more shares in the company earlier in May. Coast2Coast subsidiary Gane Holdings reduced its stake to just 14%, Ascendis said at the time in a regulatory filing. Coast2Coast owned 25.5% of Ascendis in December 2018. A year before, it had held 30.9% of the company. The private equity group has been forced to offload large chunks of Ascendis shares in recent months to meet obligations to lenders, since the stock was used as collateral for loans.