ISG shareholders fail to back Cathexis takeover bid

ISG has said there is a “clear indication” that shareholders are following the company’s board in rejecting a takeover bid by US investor Cathexis, after the offer period was extended due to a low level of acceptances.

Cathexis, which is offering £1.43 per share, a 17% premium on ISG’s closing share price on 19 December 2015, valuing the company at £71m - said on Tuesday that as of 1pm Monday it had only received acceptances for 1.58% (785,366 ISG shares) of ISG’s current issued share capital. Cathexis has extended the deadline for shareholders to show support until 1pm on 25 January.

The board of ISG responded on Tuesday by saying it noted the “very low level” of acceptances of the offer, which it said was “a clear indication that shareholders agree with the board in its rejection of the offer.”

The firm has already written to shareholders to set out their reasons for rejecting the “inadequate” offer and urging shareholders to follow them.

ISG’s board stated the offer “fails to reflect the recent growth and future potential of ISG’s core fit-out businesses”.

It also accused Cathexis of being an “astute investor which has bought its ISG shares at times when the share price has been low and now sees further value in your ISG shares at your expense”. ISG’s board added: “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,” ISG’s board added.