Huge gets outbid for Adapt IT


Huge gets outbid for Adapt IT


Published Date: 2021-04-08 | Source: Stephen Gunnion | Author: Stephen Gunnion

Huge gets outbid for Adapt IT

Volaris plans to use Adapt IT as its African champion for future transactions driven by the local management team.

Adapt IT has received a R6.50 per share cash offer to take it private, countering an unsolicited bid by Huge Group.

The technology group said Volaris, a subsidiary of Toronto-listed Constellation Software, planned to acquire control through the acquisition of up to 100% of its shares. Adapt IT shareholders will have the option of selling their shares to Volaris or remaining invested in the delisted company.

The offer follows a proposed all-share bid by Huge Group that was valued at R5.52 per share when it was announced in January. It plans to offer 0.9 of its shares for each Adapt IT share. The swap ratio was based on a reference price of R6.13 per Huge share. Yesterday, Huge Group said it had been granted an extension by the Takeover Regulation Panel for the distribution of the offer circular to Adapt IT shareholders until 16 April. Huge shareholders have already given their approval.

The Volaris offer represents a 56.9% premium to Adapt IT's average share price over the 30 days up to 26 January, the day before Huge made its unsolicited offer. It's 56.3% higher than its closing price on 1 April, the last trading day before the two companies agreed to pursue the transaction.

Adapt IT said it had set up an independent board, which planned to recommend the deal. It had already appointed Nodus Capital to give an independent opinion on Huge's takeover bid.

Shareholders collectively holding 21.6% of its shares have already given irrevocable undertakings to support the Volaris transaction. Under the scheme of arrangement, it needs the approval of 75% of shareholders. However, a general offer will kick in if the scheme fails.

Adapt IT closed 1.8% up at R4.43 yesterday while Huge was unchanged at R5.72. The announcement was made after the close of trade.


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