COMPANY COMMENT: Ascendis faces market test in hunt for R750m
The true test of shareholder resolve will come when Ascendis details the terms of the rights offer
It’s one thing to talk a share price up, but quite another to put your money where your mouth is.That is exactly what health brands conglomerate Ascendis has done by pitching a R750m rights issue at a premium to a floundering share price. There was a healthy blip in the share price on Thursday, indicating that some market participants might agree with the directors’ contention that investor sentiment should be a lot rosier for Ascendis. But the bigger picture is that the share lost more than 30% in value in the past 12 months, with the market seemingly less enamoured with the company’s aggressive acquisition strategy. All things considered, a R750m rights issue is a sizeable affair, representing almost 10% of the company’s market capitalisation. So, at this delicate juncture, the market will want to be completely satisfied that the fresh capital raised will enhance growth prospects. The true test of shareholder resolve will come when Ascendis details the terms of the rights offer. S...
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