Adapt IT’s shares rocket 39% on bidding war
DURBAN - ADAPT IT's share price surged by more than 39 percent on the JSE yesterday morning after the Canadian software company, the Volaris Group entered the fray to acquire more than 50 percent of the South African technology company for 650 cents a share, providing a stiff competition for Huge Group's offer.
The offer came after the close of the market on Wednesday and Adapt IT share price immediately leapt to a year-high of R6.18 a share on the opening of trading on the JSE, up from Wednesday's closing price of R4.43. The share closed the day at R6.40.
The offer by Volaris represents a premium of 56.9 percent to the 30-day volume weighted average traded price of Adapt IT shares on the JSE of 414c as at January 26, being the last trading date prior to the date on which the general offer by Huge Group to Adapt IT shareholders was announced.
Volaris is a subsidiary of Toronto listed Constellation Software Inc. Constellation Software has a customer base of more than 125 000 customers operating in more than 100 countries around the world and generating revenues exceeding $3.8 billion (R55.13bn).
The Volaris offer comes after the Huge Group offered to purchase all of the issued Adapt IT shares at 552c a share towards the end of January, valuing the company at R795 million.
However, in mid-February Adapt IT advised its shareholders not to act on the offer and said it had appointed an independent expert, Nodus Capital TS, to express an opinion on Huge Group's proposed offer. The circular on the Huge Group's general offer which was expected on Tuesday is now expected on or before April 16.
Volaris said in a statement: “The successful conclusion of the Volaris offer would result in a well-governed and diversified South African technology company being backed by a well-capitalised leading global technology firm keen to support further growth. Adapt IT would come to represent Volaris' interests on the African continent, a region in which Volaris currently has limited presence, but intends to grow in the coming years.
“The Volaris offer would result in much needed direct foreign investment in South Africa, additional growth capital being invested into the country and skills transfer, all to the benefit of Volaris, Adapt IT, South Africa and stakeholders in general,” Volaris said.
The offer is subject to all the applicable regulatory approvals and is also subject to Volaris acquiring more than 50 percent of the Adapt IT shares and the offer will be made by way of a
scheme of arrangement to be proposed by Adapt IT to their shareholders.
“If the scheme is not proposed or fails, Volaris will make a general offer to the Adapt IT shareholders to acquire at least 50 percent of Adapt IT shares. If the scheme is implemented, Adapt IT shareholders will be entitled to elect to retain all or part of their Adapt IT shares and remain invested in Adapt IT as a delisted company,” Volaris said.
Adapt IT chairperson Craig Chambers said the independent board of Adapt IT had taken note of Volaris's firm intention to make an offer.
“Further details of the offer from
Volaris will be included in a circular to shareholders which will contain terms of the scheme of arrangement and general offer together with the independent board's opinion and recommendation,” he said.
Adapt IT expects to provide further details on the transaction by May 31.