Hands are clean, says Shabalala

Sbu Shabalala, the founder and CEO of Adapt IT, has denied allegations that he hired thugs to beat up his estranged wife’s partner, but will take leave to deal with his personal battles through the courts. The technology group’s shares ended 4.88% up at R6.45 on Tuesday after losing as much as 13.14% on Monday.

Sbu Shabalala, the founder and CEO of technology group Adapt IT — the subject of two takeover bids valuing the firm at R1bn — has denied allegations that he had hired thugs to beat up his estranged wife’s partner, but will take leave to deal with his personal battles through the courts.

The shares of the firm, which started trading on the main board of the JSE in 2008, fell as much as 13.14% on Monday, the stock’s worst day in more than a year, amid the allegations surrounding Shabalala’s marriage published at the weekend. On Tuesday morning, the shares clawed back some of the loss, trading 4.88% higher at R6.45.

The Sunday Times reported that the partner of Neo Shabalala — Sipho Nzuza — was in a critical condition in a Durban hospital, and that Neo had sought an interdict against her estranged husband on Friday.

“The allegations against me are without merit,” Shabalala said in a statement on Tuesday. “The best way to deal with them is through the judicial system.”

Shabalala said while the latest development was unrelated to other challenges he has had to face, individuals were using “my proximity to the situation to serve their own ends. This campaign is cold-hearted and must be condemned”.

The allegations have sparked speculation as to whether Adapt IT’s potential suitors might rescind their offers.

Adapt IT, valued at R914m on the JSE, has seen its shares more than triple over the past 12 months, and has recently received buyout offers. It was subject to an R800m takeover bid from Huge Group, first announced in January. The battle intensified in April when Canada’s Volaris made a R6.50 per share offer, or a 56% premium on the closing share price on April 1. This valued Adapt IT at about R1bn.

TimesLIVE reported on Tuesday that Huge Group said its offer is still on the table. According to the report, James Herbst, CEO of Huge Group, confirmed this at a special board meeting to discuss the offer on Tuesday morning.

Even if Huge wanted to drop the deal, the offer to shareholders was unconditional and the firm was bound by it, Herbst said. The only exit would come if Huge were unable to acquire a minimum of 14,000 shares.