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Revision of Offer Consideration and extension of Closing Date
HUGE GROUP LIMITED
(Registration number 2006/023587/06)
Share code: HUG ISIN: ZAE000102042
(“Huge” or “the Company” or “the Group”)
REVISION OF OFFER CONSIDERATION AND EXTENSION OF CLOSING DATE
1. Introduction
Huge shareholders (“Huge Shareholders”) are referred to the previous
announcements released by Huge on SENS on 27 January 2021 (“the 27 January
Announcement”) and 5 February 2021 (“the 5 February 2021 Announcement”),
advising that Huge had given notice to the board of directors of Adapt IT Holdings
Limited (“Adapt IT”) that Huge had made a general offer (“Offer”) as
contemplated in section 117(c)(v) of the Companies Act, 2008 (as amended)
("Act") to the holders of ordinary shares (“Adapt IT Shareholders”) of Adapt IT
(“Adapt IT Shares”) to acquire up to 100% of the issued Adapt IT Shares (“Proposed
Transaction”).
2. Huge Shareholders and Adapt IT Shareholders are referred to the announcement
made by Adapt IT on 17 May 2021 (“the 17 May Announcement”).
3. Terms defined in the 27 January Announcement, the 5 February Announcement
and the 17 May Announcement shall bear the same meanings when used in this
announcement.
4. The Huge Offer and the Huge Offer Circular
4.1 In terms of the Huge Offer:
4.1.1 Huge offered to purchase from each Adapt IT Shareholder all, or any, of
their Adapt IT Shares for a Sale Consideration equivalent to 552 cents
per Adapt IT Share.
4.1.2 Huge undertook to discharge its obligations in relation to the Sale
Consideration by issuing to each Adapt IT Shareholder that accepts the
Offer, Consideration Shares at a swap ratio of 0.9 Huge Shares for each
Adapt IT Share tendered.
4.2 The Huge Offer Circular was posted to Adapt IT Shareholders on 16 April
2021.
5. Response of the Independent Board to the Huge Offer:
5.1 In the 17 May Announcement, the Independent Board advised Adapt IT
Shareholders that:
5.1.1 the Response Circular included the Independent Board’s response to
the Huge Offer Circular, together with the opinion of the Independent
Expert;
5.1.2 the Independent Expert had concluded that a fair price range for
Adapt IT Shares is 700 cents to 909 cents;
5.1.3 the Independent Expert is of the opinion that the Huge Offer
Consideration is unfair and unreasonable to Adapt IT Shareholders;
5.1.4 the Independent Board agrees with the opinion of the Independent
Expert; and
5.1.5 the Independent Board is of the opinion that the Huge Offer
Consideration is unfair and unreasonable to Adapt IT Shareholders.
5.2 Huge notes the Independent Board’s opinion that:
5.2.1 a fair price range for an Adapt IT share would be a minimum of 700
cents, a maximum of 909 cents and a most likely price of 805 cents (“the
Fair and Reasonable Price Parameters”); and
5.2.2 an offer consideration that falls within the Fair and Reasonable Price
Parameters would be fair and reasonable.
6. Increase in Huge Offer Consideration:
6.1 Having regard to the Independent Expert and Independent Board’s
opinion on a fair and reasonable price and the Fair and Reasonable Price
Parameters, Huge hereby announces a revision of the Huge Offer
Consideration as contemplated in Regulation 104(1)(a) as follows:
6.1.1 an increase in the originally announced Huge Offer Consideration from
552 cents per Adapt IT Share to 909 cents per Adapt IT Share); and
6.1.2 an increase in the originally announced swap ratio from 0.9 Huge Shares
for each Adapt IT Share tendered to approximately 1.37 Huge Shares for
each Adapt IT Share tendered (rounded up to the nearest whole
number).
7. Revised Huge Offer
7.1 Pursuant to the announcement of the revision of the Huge Offer
Consideration as referenced in paragraph 6, above, the terms of the
revised Huge Offer ("the Revised Huge Offer") are as follows:
7.1.1 the offeror is Huge;
7.1.2 there are no concert parties to the Revised Huge Offer;
7.1.3 Huge makes a general offer as contemplated in section 117(c)(v) of the
Act to Adapt IT Shareholders to acquire up to 100% of the issued Adapt
IT Shares;
7.1.4 the consideration is not payable in cash, as the transaction is a share
swap with a revised ratio from 0.9 to approximately 1.37 Huge Shares;
7.1.5 Huge offers to purchase from each Adapt IT Shareholder all, or any, of
their Adapt IT Shares for a consideration equivalent to 909 cents per
Adapt IT Share (“the Revised Offer Consideration”);
7.1.6 Huge undertakes to discharge its obligations in relation to the Revised
Offer Consideration by issuing to each Adapt IT Shareholder that
accepts the Revised Huge Offer Huge Shares at a swap ratio of 1.37
Huge Shares for each Adapt IT Share tendered;
7.1.7 the Revised Huge Offer is subject to the conditions that:
7.1.7.1 Adapt IT Shareholders holding 14 489 Adapt IT Shares accept the
Revised Huge Offer; and
7.1.7.2 the Panel has issued a compliance certificate as contemplated
in Regulation 102(13);
7.1.8 the pro forma impact of the Revised Huge Offer on earnings, headline
earnings, net asset value and tangible net asset value per Adapt IT
Share will be announced in due course;
7.1.9 no cash guarantee or cash confirmation is required, or will be provided
to the Panel, in terms of Regulation 111(4) in that this transaction is not a
cash transaction;
7.1.10 Huge has sufficient authorised but unissued securities available to settle
the Revised Offer Consideration;
7.1.11 no beneficial interest in Adapt IT is held or controlled, directly or
indirectly, by:
7.1.11.1 Huge;
7.1.11.2 any person acting in concert with Huge
7.1.11.3 any person in respect of which Huge has received an irrevocable
commitment to accept or vote in favour of the Revised Huge
Offer
7.1.12 Huge does not hold an option to purchase any beneficial interest in
Adapt IT;
7.1.13 no person acting in concert with Huge holds an offer to purchase any
beneficial interest in Adapt IT.
8. Pertinent Dates relating to the Revised Huge Offer
8.1 The Independent Board of Adapt IT is required to announce a response to
this announcement of the Revised Offer Consideration, setting out in detail
its opinion and the opinion of its independent expert, within 5 business days
of the date of this announcement;
8.2 The Closing Date of the Revised Huge Offer is extended from 23 July 2021
to 30 July 2021.
9. Irrevocable undertakings
9.1 The board of directors of Huge (“the Huge Board”) confirms that Huge is
ready, able and willing to implement the Revised Huge Offer.
9.2 The Huge Board has procured irrevocable undertakings from Huge
Shareholders holding 75.71% of the issued share capital of Huge to vote in
favour of all and any shareholder resolutions necessary to implement the
Revised Huge Offer and the Proposed Transaction.
10. Adapt IT Shareholders are referred to the SENS announcement published by the
Independent Board of Adapt IT on 21 April 2021 advising Adapt IT Shareholders that:
10.1 It had come to the Independent Board’s attention that certain Central
Securities Depository Participants (“CSDP”) were requesting Adapt IT
Shareholders to respond to the Huge Offer by 22 April 2021.
10.2 Adapt IT Shareholders are reminded that whilst the Huge Offer opened on
Monday 19 April 2021, Adapt IT shareholders did not need to take any
action prior to receiving the Response Circular.
10.3 The Independent Board urged Adapt IT Shareholders not to make any
decisions, take any actions or provide any undertakings in relation to the
Huge Offer, until they have received the opinions of the Independent Board
and the Independent Expert, as to whether or not the Huge Offer
consideration is fair and reasonable.
10.4 Adapt IT had announced an alternative offer from Volaris Group
Incorporated of 650 cents per Adapt IT Share by way of a scheme of
arrangement to be proposed by Adapt IT to its shareholders, which scheme
of arrangement will be accompanied by a standby general offer (“Volaris
Offer”).
10.5 It was expected that the circular containing the Volaris Offer would be
distributed in May 2021.
11. Action required of Adapt IT Shareholders
11.1 Given the publishing of the Response Circular, Adapt IT Shareholders are
now in a position to:
11.1.1 consider the Revised Huge Offer equivalent of 909 cents per Adapt IT
Share and its fairness and reasonableness;
11.1.2 consider the Volaris Offer of 650 cents per Adapt IT share in relation to
the Revised Huge Offer; and
11.1.3 if they so wish, engage with their CSDPs to accept the Revised Huge
Offer.
12. Responsibility statement
The Huge Board accepts responsibility for the information contained in this
announcement insofar as it relates to Huge. To the best of its knowledge and belief,
the information contained in this announcement is true and the announcement
does not omit anything likely to affect the importance of the information.
28 May 2021
Corporate Advisor and Transaction Sponsor
Questco Proprietary Limited
Legal Advisor
Herbert Smith Freehills South Africa LLP
Date: 28-05-2021 03:15:00
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