Huge deal falls through

By Nicola Mawson, Contributing journalist

Johannesburg, 15 Jun 2009

Telecommunications company the Huge Group has withdrawn its cautionary announcement after an investor decided to no longer put in funds. The company also claims it never intended to leave the bourse.

Executive chairman Anton Potgieter says discussions with an investor have ended because the investor had a conflict of interests. “A number of other investors have expressed interest in the company and, if these discussions progress, the appropriate announcements will be made,” he says.

Huge issued a cautionary in April, saying it was in “preliminary discussions regarding the structure, funding and outcome of a transaction that, if proposed, would result in the same offer being made to all shareholders for them to sell, on a voluntary basis, all or some of their shares in the company for a cash price”.

The company had interest from a financial investor; however, it was “premised on its investment being into an unlisted company”.

No intention

Potgieter says Huge has never stated any intention to delist from the JSE. “We have stated that delisting was the preferred option of one of the investors to whom we were talking. Those discussions have now ended due to a conflict this investor has with another investment and, as a result, we have lifted the cautionary notice to shareholders.”

However, in March, Huge threatened to delist from the bourse in protest after the JSE said Huge had contravened its regulations. Huge said its single stock future and contracts for deadline transactions were “purchases of exposures to derivative instruments” and were, therefore, within JSE regulations. The JSE's findings, on the other hand, stated these repurchases constituted a related party transaction and were in contravention of its rules.

Huge already had support from a number of shareholders willing to sell shares for no less than R1.60. However, the purchase of shares has now been halted.

Huge shares closed at R1.05 on Friday.