Huge Group has abandoned its efforts to play a role in the future of Adapt IT. That’s clear after it emerged on Tuesday that it sold the shares it acquired as part of its earlier aggressive search for the JSE-listed software services group.
Adapt IT, which released its 2021 financial results on Tuesday, confirmed that Huge Group had sold 1.9% of the group it acquired through its unsolicited stock exchange offer to Adapt shareholders.
It is highly likely that Adapt IT will now be acquired by another suitor, Volaris Group of Canada, and removed from the JSE list. Volaris Group is offering shareholders R7 / share in cash, sweetened from a previous offering of R6.50 / share in cash.
On August 2, Huge Group disclosed that Adapt IT shareholders who owned 2.61 million Adapt IT shares, representing 1.9% of Adapt IT’s total ordinary share capital, excluding treasury shares, had agreed your offer. As a result, Huge delivered 3.58 million Huge shares in liquidation to those shareholders.
The small acceptance of the huge offer paved the way for the Volaris offer to proceed, with Adapt IT shareholders in July approving all resolutions presented at a general meeting.
When the results of the huge offering were released, CEO James Herbst said the company was not giving up on its search for Adapt IT. “There is nothing stopping Huge from leveraging its stake in Adapt IT, and this is certainly one of the options we will consider.”
Huge Group chairman Duarte da Silva said in a statement at the time that Huge Group would be prepared to work with Volaris Group “as a shareholder partner, if they successfully overcome transaction hurdles.”
“If they do not pursue their offering, then working with existing Adapt IT stakeholders remains our stated priority … As an Adapt IT shareholder, and now one of the top 10 largest shareholders, we will be carefully monitoring the various aspects. de la Volaris offers, among others, South African regulatory approvals ”.
Huge Group COO Andy Openshaw added: “There will be commentators who will argue that it is not worth holding a 1.9% stake in Adapt IT and that we should sell these shares on the market and raise R18 million, or finally sell these shares to Volaris at R7 / share if they continue with their offering.
“While this would be consistent with our message to Adapt IT shareholders that there are risks in holding shares in a foreign private company that is not publicly traded, it would not be consistent with our message to Adapt IT shareholders that they would retain exposure to Adapt IT by exchanging your Adapt IT shares for Huge shares. We will have to poll these Adapt IT shareholders before making any decisions, ”Openshaw said.
When asked Tuesday why Huge Group had decided to leave its position at Adapt IT, CEO James Herbst said: “It was a risk assessment. Huge Group sold its shares because the increase to R7 was not sufficient for the downside risk that the Volaris offering would not close and the stock could possibly return to pre-offering levels. ”
Duncan McLeod is an editor at TechCentral, where this article was first published. here.
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