ISG concedes defeat in takeover battle
The directors of ISG have given up their fight against a hostile takeover bid and are now recommending shareholders accept the 171p offer from Cathexis UK Holdings.
Cathexis, a US-owned investment fund, already owned nearly 30% of ISG when it made an unwelcomed bid to take full control in December. Its opening bid of 143p secured it an additional 1.7% of the shares. On 29th January it increased its offer to 171p – raising the valuation from £71m to £85m – but still the board urged shareholders not to sell. However, over the past three weeks Cathexis has grown its shareholding to 48.4%.
In a volte face today, the ISG board issued a statement acknowledging, in effect, that the game was effectively up and said it was now recommending other shareholders to sell to Cathexis.
It said that even if Cathexis’ shareholding stays below 50%, it would be “such a significant minority shareholder that it would be extremely difficult and unlikely for other shareholders to have influence in any shareholder vote”.
It added: “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.”
Update: By the end of the day of ISG's declaration of submission, Cathexis had gathered 62.93% of the current issued share capital of ISG.
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This article was published on 17 Feb 2016 (last updated on 26 Feb 2016).