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Directors’ Dealings: The GP’s choice – Financial Mail


The co-founders of Ascendis Health, Cris Dillon and Gary Shayne, are still aggressively gulping their own medicine. They are putting their money behind their vision of creating privately owned and managed businesses.

Through Coast2Coast, a private investment vehicle, the founders of Ascendis paid about R200m to acquire more of the company’s stock in a R1.2bn rights offer that was three times oversubscribed last week.

Shayne owns 85% of Coast2Coast. Dillon has a 15% interest. They are both non-executive directors in Ascendis. Their appetite for Ascendis stock seems insatiable. The founders also put in a further combined R5m to buy additional stock for their personal accounts. Ascendis CEO Karsten Wellner also prescribed some of the Ascendis stock for himself. He subscribed for R9.5m worth of shares while executive director Cliff Sampson acquired R1.6m in a dose of shares.

The rights offer raised funding for the acquisitions of Cyprus-based pharmaceutical company Remedica and European sports nutrition company Scitec International. This corporate action came soon after Ascendis’ acquisition of a 49% share in Spanish pharmaceutical company Farmalider in August last year. It also agreed on an option to buy the remaining 51% of the Spanish drug maker.

The executive participation in the rights offer is not without merit. There have been significant benefits. Having acquired shares at the rights offer price of R22/share, the investors are already in the money. The share is trading at R25, giving the eight-year-old company a market capitalisation of R8.8bn.

(Struggling industry stalwart Adcock Ingram, on the other hand, is valued at R7.9bn.)

This has not escaped the market’s attention. The four analysts who cover the stock have given the company a unanimous "buy" recommendation. That, too, is not unwarranted. Since coming onto the JSE in November 2013, the share has jumped nearly three-fold from a low of just under R10, to the current price.

Over the same period, Adcock Ingram shares have fallen by 6% while those of Aspen Pharmacare returned 7.34%. Ron Traill, CEO of the SA division at Mondi, disposed of 30,000 shares last week at a price of £16/share. He took home a not insignificant £480,000. That is a little more than R8m. This follows his other sale of 40,000 shares in late June, for a take-home of about R9m. Traill remains mum as to why he’s cashing out.

The strong rand has depressed Mondi’s foreign-generated revenue in recent months. Even though interim revenue in the period to June fell slightly against the previous year, pre-tax profit rose.

While the traditional paper industry is no doubt in decline, Mondi increased its cash generated from operations by 15%. The past two years have not been the MTN Group’s best. The stock has come crashing down from more than R260/share, to the current R130. That, however, presents some opportunities for investors.

Sandile Ntsele, executive director of MTN subsidiary Mobile Telephone Networks, is among those who see the opportunity in the firm’s current misfortunes. He spent R242,000 buying 2,000 MTN shares.

Read the Article on Financial Mail here - www.financialmail.co.za