ADAPT IT shareholders holding a paltry 1.9 percent of the company’s shares have accepted telecoms company Huge Group’s share swop offer to acquire 100 percent of the software and services company.
The low acceptance of the Huge offer followed the majority passing of a resolution last month at the Adapt IT general meeting to accept a counter offer by Canada-based Volaris Group, which had upped its initial cash offer to acquire Adapt IT from R6.50 to R7 per share.
In light of the tussle to woo Adapt IT shareholders, Huge Group over the course of its seven-month campaign for the acquisition also improved an earlier share swop offer from 0.9 Huge shares per Adapt IT Share to 1.37 Huge shares per Adapt IT Share.
Volaris’ updated offer represented a premium of 69.1 percent to the 30-day volume weighted average traded price of Adapt IT shares of R4.14, as at January 26, 2021, the last trading date prior to when the Huge Group offer was announced.
Adapt IT’s share price was 0.59 percent lower at R6.75 yesterday. Huge
Group’s share price was unchanged at R5.90 per share.
Adapt IT shareholders have also voted in favour of it being delisted should the Volaris deal proceed.
Huge said in a statement yesterday that Adapt IT shareholders holding 2 612 719 Adapt IT shares, representing 1.9 percent of its shares, excluding treasury shares, had accepted the offer by Friday, when the offer closed.
It had delivered 3 579 418 Huge shares and a cash fractional entitlement of R39.52 in settlement of the offer consideration.
Mergence head of Equities Peter Takendesa said he was not surprised about the low acceptance of the Huge offer, as investors had to “some extent become a bit frustrated about the offer”.
@FinanceGhost remarked on Twitter: “Huge is paying all of R39.52 in fractional entitlements to Adapt IT shareholders. That tells you everything about the final result.”
Last month, the Takeover Regulation Panel (TRP) asked Huge to remove from its employees’ social media a video relating to Huge’s offer to Adapt IT shareholders, as the video had constituted an “announcement” by Huge that needed approval from the TRP.
It was the second time the TRP asked Huge to take down a video that purportedly highlighted the benefits of Huge’s bid, as opposed to the offer by Volaris Group.
Trading in Adapt IT shares on the JSE was expected to be suspended from December 1.
edward.west@inl.co.za
BUSINESS REPORT ONLINE