Yesterday the South African-based global health and care company issued a third cautionary announcement regarding the possible disposal of Remedica, a company it acquired in 2016 for 260 million (R4.05 billion).
The possible disposal cheered the share price in January, rising as much as 14percent, but yesterday the stock plummeted by more than 3percent to R5.20 a share as the negotiations drag on. The shares closed at R5.25 at the end of the day.
“Shareholders are referred to the previous cautionary and subsequent renewals thereof, the latest being done on June 7, relating to an unsolicited offer received for the Remedica business unit (Remedica) in Cyprus. Ascendis Health is involved in ongoing negotiations regarding the potential disposal of Remedica and will update investors should a transaction be concluded,” the group said in a trading statement.
The acquisition of Remedica as well as Europe’s leading sports nutrition company, Scitec, for 170m in 2016 was expected to lift the group’s market capitalisation to R11bn, but instead the company has been faced with mounting debt, weak earnings growth and a market capitalisation that is below R3bn.