Acasta, Anson fight intensifies over debt scheme

A disagreement between Toronto-based Acasta Enterprises Inc. and a hedge-fund manager that owns shares escalated sharply on Wednesday, with the two sides trading barbs over a proposed debt-to-equity swap and other allegations.

The spat first broke out into the open on Tuesday, when Anson Advisors Inc., a entity related to Anson Funds, a privately held alternative asset manager, issued a press release requesting the Toronto Stock Exchange require Acasta to get “disinterested shareholder approval” for a proposed transaction involving the company’s recently appointed co-CEOs.

On Wednesday, Acasta fired back, defending the transaction and accusing Anson of presenting information that was “not factual” and “misleading.”

In their release, Acasta alleged that Anson, “appears to have had access to confidential information about the Company which raises serious concerns for the Company as to whether Anson Funds traded in the Company’s securities while in possession of material undisclosed information.”

Acasta added it had “shared its concerns with the applicable regulators regarding possible insider trading by Anson Funds, as well as Anson Funds’ and its joint actors’ non-compliance with early warning reporting requirements.”

Following Acasta’s accusations, Anson said in another release on Wednesday that Acasta’s allegations were “untrue and are made as a tactical ploy in an effort to damage Anson’s credibility and deflect attention away from the fact” that the proposed debt conversion is not in the best interests of Acasta, among other things.

Anson denied having “traded securities of Acasta while it was in possession of material non-public information.”

Anson said the proposed price of the $4.8-million debt-to-equity conversion, at nearly 74 cents per share, is at “a significant discount to the current market price” and alleged the intent of the deal is “to transfer value from Acasta and its minority shareholders” to Acasta co-CEOs Charles and Richard Wachsberg.

Acasta launched in 2015 with the backing of prominent Canadian business people. It said that, subject to TSX approval, it expected the conversion to be done on or after Feb. 18.