Canadian group's bid for Adapt IT is progressing – despite accusations against CEO

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Adapt IT
Adapt IT

The Canadian company Volaris on Monday said it "noted" allegations against the founder and CEO of Adapt IT, Sbu Shabalala, who has been accused by his estranged wife of orchestrating a violent attack on her partner.

"Volaris acknowledges the responsibility of the Adapt IT board to address this matter and will allow for due process to run its course before providing further comment on the matter," the company said in a statement.

Meanwhile, the company’s bid to buy the South African software group seems to be progressing, with a notice on Monday that it is waiving a previous condition for the deal’s approval: a recommendation from an independent Adapt IT board that they support the takeover and delisting from the JSE. Adapt IT said that a note will be released no later than 4 June about the potential delisting.

The companies also said that another condition for the bid has been fulfilled. This was a requirement that an independent expert prepare a report on how fair and reasonable the Volaris offer is.

Earlier on Monday, Adapt IT released an independent report about another takeover bid, that of telecoms group Huge Group. It launched a hostile bid for Adapt IT earlier this year, and the report found that the terms of Huge's offer were "unfair and unreasonable" to Adapt IT shareholders.

Volaris is offering R6.50 a share in cash, while as part of Huge’s initial offer, Adapt IT shareholders would get 0.9 Huge Group share for every one Adapt IT share they held. At the time of the offer, that worked out to R5.52 per share.

But according to the independent expert view, a fair price range for Adapt IT is R7.00 to R9.09 a share. Its shares are currently trading at R6.35.

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