The proceeds to be used for future portfolio acquisitions of two telcos
By Gugu Lourie
JSE-listed telecommunications firm Huge Group, which is on a hunt for buys, is stepping up its acquisition strategy with the launch of two private placement of new shares to institutional investors for a targeted amount of $100 million (R1.2 billion).
The company said on Thursday that it “is engaged in discussions involving the possibility of two further acquisitions”.
Huge is currently trading under cautionary related a strategic acquisition of a telecom company.
The telecoms firm – which has a market capitalisation of more than R388m – told investors on Thursday that it is seeking to raise capital via private placement of its shares to facilitate the acquisitions.
It said Forefront Capital Markets will be acting as the company’s financial advisor and placement agent of securities valued at $50 million.
Forefront Capital Markets will also advise Huge Group in acquisition of a telecom company valued at $100 million.
Huge Group also announced that a London-based financial advisory service company will be acting as the company’s financial advisor and placement agent of further securities valued at $50 million.
The London-based Placement Agent will also advise Huge Group in purchasing of another telecom firm for $100 million.
The South African-based telecoms firm said terms of the securities and the proceeds of the two private placements will be negotiated substantially between both the London-based Placement Agent and Forefront Capital, and with one or more investors.
“The conclusion of agreements with two leading international providers of financial advisory services places Huge in a position to raise capital,” said Huge Group.
The company advised its investors to continue to exercise caution when dealing in its securities until a further announcement is made.
Buoyed by its rising share price, JSE-listed telecommunications firm Huge Group has set its sights on niche acquisitions in South Africa, where it sees itself as a natural consolidator.
Huge Group – which has a market capitalisation of more than R388m –has seen its stock rise close to 300% in the past three years and 164% in the past year.
The counter is currently trading at R3.50 a share for a healthy 61% growth in the past 90 days.
Huge Group’s strategy has clearly struck a chord with investors.
For more, read: Huge Group scouting for acquisitions