Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Close

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the new Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

  • You are here:ISG

Cathexis holds firm on ISG offer as it warns on 'future support'

The ISG board has reiterated its rejection of a takeover attempt by Cathexis, telling its shareholders the Texan firm “sees further value in your shares at your expense”.

Following an update to the City by Cathexis, ISG hit back, saying the US firm’s “inadequate offer fails to reflect the recent growth and future potential of ISG’s core fit out businesses”.

It said Cathexis was “an astute investor” which had raised its stake in the contractor at a time when the share price had been low.

ISG’s board further warned: “Cathexis is not paying an adequate premium for control of your company and your dividend is at risk if it seizes control of your company.”

The ISG response came after Cathexis had earlier said its offer for ISG “fairly reflects its strengths” and warned rejection of its terms would “limit its ability to provide future support”.

In a statement to the City, Cathexis said ISG’s revised defence advising shareholders against the takeover contained “a number of statements” to which Cathexis wished to respond.

It said: 

  • ISG had demonstrated a history of volatile trading, had repeatedly failed to meet expectations and had delivered poor returns to shareholders relative to its peers;
  • The offer price fairly reflected ISG’s strengths while also taking into account its volatile performance, client concentration and the cyclicality of its industry;
  • Cathexis had been a supportive shareholder – but, if the offer does not succeed, the provisions of the City Code would limit its ability to provide future support.

The provisional time for ISG shareholders to accept the Cathexis offer is 1pm on 25 January 2016.

Cathexis’s offer of 143p per share, which values the company at £71m, was accepted by shareholders representing just 1.58 per cent of the fit-out specialist’s total stock last week.

Cathexis previously held 29.5 per cent of ISG shares.

The investment firm opted to extend the offer by two weeks to 25 January after the response rate was revealed.

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.