US investor Cathexis struggles to attract shareholder support for £71m takeover
The US investor bidding to buy ISG has once again admitted it is well short of securing sufficient shareholder support to seal the deal and has extended the offer deadline for a second time to 1 February (next Monday).
In a statement this morning Cathexis said it had secured support from 1.7% of ISG shareholders for the £71m takeover by today’s deadline, which was itself an extension.
Added to its own shareholding in ISG of 29.6%, Cathexis has effective 31.2% support for the takeover - well below the 90% acceptance threshold set.
In today’s statement Cathexis once again encouraged ISG shareholders to accept the offer “as soon as possible”.
The latest development comes after Cathexis last week slammed ISG’s performance and said it believed its offer price “fairly” reflects ISG’s strengths, adding: “ISG has demonstrated a history of volatile trading, has repeatedly failed to meet expectations and has delivered poor returns to shareholders relative to its peers.”
Cathexis said the bid price took into account the firm’s “volatile performance, client concentration and the cyclicality of the industry.”
On 30 December 2015 the board of ISG published a revised defence document calling Cathexis’ offer of £1.43 per share “inadequate” and urging shareholders to not accept it.
ISG’s board in its defence documents also accused Cathexis of being an “astute investor” who bought ISG shares when the share price was low and “now sees further value in your ISG shares at your expense”
In response to this accusation Cathexis said it has been “a supportive shareholder,” but added that if its offer did not succeed “the provisions of the City Code limit its ability to provide future support”.
Cathexis’ offer - a 17% premium on ISG’s closing share price on 19 December 2015 - values the company at £71m.