Cape Times

Adapt IT shares show big gain on Huge Group’s acquisitio­n offer

- SANDILE MCHUNU sandile.mchunu@inl.co.za

ADAPT IT’s share price rose more than 12 percent on the JSE yesterday morning after the Huge Group made an unsolicite­d general offer to acquire all of the issued share capital of the specialise­d software and digitally-led business solutions company.

Huge Group is offering to purchase all of the issued Adapt IT shares at 552 cents a share, valuing the company at R795 million, and the group said the offer represente­d a 33 percent premium on its 30-day weighted average traded price on January 26.

Adapt IT said the offer considerat­ion from Huge is a swop ratio of 0.9 of a Huge share for every one Adapt IT share tendered.

“The swop ratio is based on a reference price of 613c per Huge share and an implied price of 552c per Adapt IT share,” Adapt IT said.

Adapt IT’s share price leapt by more than 12 percent yesterday morning to a day high of R5.21, up from Wednesday’s closing price of R4.01.

However, the share price was still down by 72 percent compared to its high of R16.50 achieved in October 2016.

Adapt IT’s share price has been on the mend in the past six months, recovering from R1.17 recorded at the end of September last year.

Adapt IT said the deal was conditiona­l on Huge Group receiving shareholde­r approval from its shareholde­rs in terms of section 9.20 of the JSE Listings Requiremen­ts and the Takeover Regulation­s Panel having issued a compliance certificat­e in relation to the offer.

“As the offer is conditiona­l on the approval by Huge shareholde­rs, Adapt IT will keep shareholde­rs informed and up to date on this process,” the group said.

Peter Takaendesa, the head of equities at Mergence Investment Managers, said Huge’s offer to Adapt IT shareholde­rs was opportunis­tic and probably not enough to get all Adapt IT shareholde­rs to accept the deal.

“Ultimately, it will all come down to how Adapt IT shareholde­rs view the potential upside in Huge shares offered to them in exchange compared to simply holding on to their Adapt IT shares that are down about 70 percent from their peak a few years ago,” Takaendesa said.

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