Asensus Will File for Bankruptcy Should KARL STORZ Merger Fail

Asensus Surgical revealed that it will file for bankruptcy if its impending merger with KARL STORZ is not approved.
 
The surgical robotics company recommended in its Q2 earnings report that stockholders vote in favor of the merger proposal as the August 20 extended deadline date looms. Asensus said it’s received proxies for about 55% of outstanding shares, with over 80% voting in favor of the proposal. Approval from a majority of all common stock shares is needed.
 
The merger isn’t approved, the company said it will incur “significant near-term financial obligations.” These include a $20 million repayment of KARL STORZ’s securitized note, interest and prepayment premium, and expenses related to the transaction. Asensus warned the obligations will exceed the company’s current assets—over $300 million would need to be raised to support operations through 2027.
 
“We’re at a critical juncture for our company. After thoroughly exploring all reasonably available options, we believe the Merger proposal offers the best opportunity to maximize value for our stockholders in our current circumstances,” said Anthony Fernando, Asensus Surgical president and CEO. “While we understand the offer price may not meet everyone’s expectations, it does provide a definite return in a challenging financial environment. If the Merger is not approved, we expect to seek bankruptcy protection. We encourage all stockholders to carefully review the information we’ve provided and to participate in this crucial vote. Every vote matters as we determine the best path forward for Asensus Surgical and all of our stakeholders.”

More about the Asensus-KARL STORZ merger

The company began talks to be acquired by KARL STORZ in early June 2024. The deal was first valued at $0.35 per share in cash, which the company said was an about 67% premium based on Asensus’ stock closing price on April 2.
 
The company said while lower than historical valuations, it believes this represents the best available price given current circumstances. Various alternatives were explored, including partnerships and potential acquisitions, but Asensus said no other possible counterparty showed interest in a transaction at a higher price.
 
“Stockholder participation in this vote is crucial,” Asensus urged in a press release. “Abstaining or failing to vote is effectively the same as voting against the merger proposal, as approval is needed from a majority of outstanding shares, not just a majority of votes cast.”