The ongoing merger between Asensus Surgical and Karl Storz has hit a bump as Asensus faces allegations of disclosure deficiencies. Asensus, renowned for its Senhance Surgical System, is being acquired by Karl Storz for 35 cents per share. The company’s board approved the merger, which is set for a special stockholder meeting on August 7. This merger is seen as a strategic move to bolster Asensus’s position in the competitive market of surgical robotics.
Asensus previously received FDA approval for the Senhance Surgical System, marking a significant milestone in regulatory compliance. Historically, the company has faced challenges in the realm of robotics, particularly concerning regulatory approvals and financial constraints. Comparatively, the merger could offer financial stability and potential growth opportunities. However, the allegations of inadequate disclosures have thrown a curveball in the process.
Similar instances have occurred in the past where mergers and acquisitions were delayed or canceled due to such allegations. The surgical robotics industry, marked by stringent regulatory oversight, has seen its fair share of controversies. The current situation with Asensus is reminiscent of those instances, demonstrating the delicate nature of these high-stake deals.
Asensus Surgical Refutes Stockholder Allegations
After filing the proxy statement, Asensus responded to demand letters from stockholders claiming disclosure deficiencies. According to Asensus, these allegations are unfounded.
“The company denies that it has violated any laws or breached any duties to the company’s stockholders, denies all allegations in the demand letters, and believes no supplemental disclosures to the proxy statement were or are required under any applicable law, rule or regulation,”
stated the company. Despite this, Asensus decided to supplement its proxy statement to avoid litigation and ensure the merger goes smoothly.
More on the Alleged Disclosures
The seven supplemental disclosures focus on confidentiality agreements, the use of consultants, financial advisors, and discussions with other companies. Disclosure 1 details meetings between Asensus CEO Anthony Fernando and representatives from three global medical device manufacturers, resulting in confidentiality agreements. Disclosure 2 amends updates on alternative options and financial assessments. Disclosure 3 modifies descriptions of Asensus’s engagement with Jefferies as a financial advisor. Disclosure 4 covers management activities over the past two years, while Disclosure 5 outlines interactions with the companies mentioned in Disclosure 1.
Disclosure 6 clarifies Jefferies’ terminal value calculations, and Disclosure 7 explains the derivation of cash flow values. These disclosures aim to address the stockholders’ concerns and ensure transparency. Asensus asserts that its disclosures comply fully with applicable laws and that no admission of legal necessity is implied.
The outcome of the Asensus and Karl Storz merger remains uncertain amid these allegations. The surgical robotics industry is highly competitive and scrutinized, making regulatory compliance and transparency crucial. The merger, if successful, could provide Asensus with the financial backing and strategic partnerships needed to thrive.
