TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      Google’s giant Equiano Internet cable has landed in South Africa

      8 August 2022

      The African tech start-ups eyeing global markets

      8 August 2022

      Karpowership loses bid to overturn environmental ruling

      8 August 2022

      New app launched to tackle potholes in South Africa

      8 August 2022

      Rogue database felled Capitec in its worst-ever IT outage

      7 August 2022
    • World

      Nvidia issues profit warning on slump in demand for graphics cards

      8 August 2022

      Buterin: Mining on Ethereum Classic won’t affect Merge

      8 August 2022

      Musk challenges Twitter CEO to a public debate

      7 August 2022

      Amazon splashes $1.7-billion on Roomba maker iRobot

      5 August 2022

      Nigeria asks Google to block banned groups from YouTube

      5 August 2022
    • In-depth

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022

      E-mail scams are getting chillingly personal

      17 July 2022

      Webb telescope’s stunning images of the cosmos

      12 July 2022
    • Podcasts

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022

      Demystifying the complexity of AI – fact vs fiction

      6 July 2022

      How your organisation can triage its information security risk

      22 June 2022
    • Opinion

      SIU seeks to set aside R215-million IT tender

      19 July 2022

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»IT services»Huge Group in audacious bid to acquire Adapt IT

    Huge Group in audacious bid to acquire Adapt IT

    IT services By Duncan McLeod27 January 2021
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Huge Group CEO James Herbst

    Huge Group has launched a takeover bid for fellow JSE-listed technology company Adapt IT, a surprising move at face value given that Huge focuses on telecommunications and Adapt IT on software and IT services.

    The all-share bid, at an offer price of R5.52/share that values Adapt IT at R795-million, does not enjoy the explicit support of Adapt IT’s board. However, it’s not immediately clear if the approach will be considered hostile by Adapt IT, whose management team is led by CEO Sbu Shabalala.

    If all shareholders accept the offer, Huge Group will have to issue about 130 million new shares.

    The R5.52/share offer represents a 33% premium on the 30-day volume-weighted average price at which an Adapt IT share has traded

    Huge Group CEO James Herbst, speaking to TechCentral on Wednesday evening after the company alerted shareholders about the offer, said that although Huge wants to buy 100% of Adapt IT, it will settle for a stake below that, too. If it is successful in buying all of Adapt IT, though, Adapt IT will be delisted from the JSE.

    The offer was communicated on Wednesday afternoon to Adapt IT’s board. The board is now required, in terms of South African company law, to establish an independent board to evaluate the offer, Herbst said.

    The R5.52/share offer represents a 33% premium to the 30-day volume-weighted average price at which Adapt IT has traded. It is a 38% premium to Wednesday’s closing price. It is, however, well below Adapt IT’s share price in 2016, when it peaked above R15/share before a multi-year disintegration in its valuation.

    Swap ratio

    “Based on a reference price of a Huge Group share of R6.12, Huge Group is prepared to acquire one Adapt IT share for a purchase consideration of R5.52 to be settled by the delivery of 0.9 Huge Group shares, which is commonly referred to as the swap ratio,” Huge Group said in a statement after markets closed.

    “Adapt IT shareholders have seen over a 240% increase in the value of their shares since 28 September last year, when their shares touched a 52-week low of R1.17.”

    Huge Group said Adapt IT shareholders can tender some rather than all their shares and no minimum acceptance level has been set. “Owning 100%, or absolute control, is not critical in this instance,” said Huge Group chief operating officer Andy Openshaw. “Therefore, for the time being, we don’t want to be involved in an offer with unnecessary hurdles, thereby diminishing our ability to succeed.”

    Adapt IT CEO Sbu Shabalala

    Herbst added that Huge Group will accept “any shareholder tendering part or all their shares”.

    “The largest shareholder in Adapt IT holds just over 10%. If 20% of the Adapt IT shareholders tender half their shares in this offer, we will be pleased. We might even become the single largest shareholder; it will give us influence and possibly participation at a board level.”

    A combined group would have close to R2-billion in revenue and operating profit of about R333-million.

    Huge Group chairman Duarte da Silva said: “The business strategy of Adapt IT, which explicitly targets increasing annuity revenue from software-related products and services, is aligned to the business strategies of Huge Group’s existing operating companies to grow annuity revenue from products and services related to connectivity.

    “There is a compelling story. The markets in which Adapt IT and Huge Group operate are similar and the economies of a larger company that can both withstand greater challenges and exploit expansive opportunities because of size and scale is appealing,” said Da Silva.  — © 2021 NewsCentral Media

    • Now read: Huge Group seeks London listing
    Adapt IT Andy Openshaw Duarte da Silva Huge Group James Herbst Sbu Shabalala top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleMTN sues Icasa over 5G spectrum auction plan
    Next Article HPE announces winners of 2020 Channel Partner Awards

    Related Posts

    Google’s giant Equiano Internet cable has landed in South Africa

    8 August 2022

    The African tech start-ups eyeing global markets

    8 August 2022

    Nvidia issues profit warning on slump in demand for graphics cards

    8 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    You don’t need a call centre to take advantage of call centre technology

    5 August 2022

    Black man, you are still on your own

    5 August 2022

    UC&C interoperability offers businesses operational cost relief in tough times

    4 August 2022
    Opinion

    SIU seeks to set aside R215-million IT tender

    19 July 2022

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.