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ISG set for US takeover after board admits defeat on revised offer

The ISG board has paved the way for a takeover by Cathexis after telling shareholders to accept a revised offer from the US raider.

The dramatic U-turn comes after weeks of wrangling over the ownership of the fit-out specialist.

The board said the move was prompted by the announcement that Cathexis had taken its share holding of ISG to over 48 per cent.

However, it maintained that the 171p per share offer “undervalues the company and its prospects”.

The offer, which values the company at around £85m, was an increase on the initial offer of 143p per share made in December 2015.

Despite insisting the bid was too low, the board added in its statement to the City today: “Cathexis would now be such a significant minority shareholder that it would be extremely difficult and unlikely for other shareholders to have influence in any shareholder vote.

“As such, Cathexis could take actions that may be to the potential detriment of shareholders. The board considers that it is in the best interests of the company that the company’s ownership should be clear to all stakeholders including employees, clients, subcontractors and funders.”

The takeover bid was launched last year in the wake of a string of profit warnings at ISG. In September, the group also reported a £27.8m loss for 2014/15.

ISG’s next set of interim results will be announced on 8 March.

Readers' comments (2)

  • I wonder if there will be a big shake up in the Senior Management teams across their business?
    I think £85m is way too much for a business that struggles to make a decent margin on such a large turnover....profitability has always been a problem for them...
    Is this the beginning of the end for ISG?

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  • They have had underlying problems for a while now... Several decent employees have left in the last 18 months!

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