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.
- 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.