Offer comes after ISG profit warning last week
US investor Cathexis has launched a 拢71m takeover bid for UK contractor ISG.
In a statement setting out the terms of its offer published this morning, Cathexis says it is offering 拢1.43 per share, a 17% premium on ISG鈥檚 closing share price yesterday, and valuing the company at 拢71m.
The offer comes after a difficult trading period for ISG caused by problem legacy contracts in its UK construction division, .
In its statement Cathexis argues ISG is better suited to private ownership 鈥渄ue to the size of the company, the nature of its business, the cyclicality of its markets and the volatility of its share price and trading performance鈥�.
The statement reveals Cathexis first approached ISG鈥檚 board with an offer in June this year, but was rebuffed and told it had 鈥渧ery significantly undervalued the company鈥�. However, Cathexis said the profit warning last week 鈥渞eaffirmed its conclusion that ISG ought to be a private company鈥�.
Cathexis added: 鈥淸The deal would] enhance the company鈥檚 long-term strategic potential and allow its management to focus on growth.
鈥淐athexis believes the offer provides the certainty of a realisable value to ISG shareholders and allows them to mitigate the inherent risks that the Company鈥檚 core construction business, by its nature, is unpredictable and prone to extraordinary losses from time to time.鈥�
Cathexis is seeking approval from 90% of ISG shareholders to seal the deal. It already owns 30% of ISG鈥檚 shares.
ISG is led by chief executive David Lawther (pictured).
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