LONDON (Alliance News) - Construction services company ISG PLC on Wednesday switched its recommendation on the takeover offer made for the company by Cathexis UK Holdings Ltd, saying it now appears in the best interests of shareholders to accept the offer.
ISG said it still considers the terms of the offer, by which Cathexis is offering 171.00 pence per share for the group, valuing it at around GBP84.6 million, undervalues the business and its prospects.
However, due to the significant shareholding Cathexis and related parties would have in the business should the offer fail to become unconditional and lapse, which would be around 48%, ISG said it now thinks accepting the offer is in the best interests of shareholders.
It said that, given the large minority holding Cathexis would have in the business, it would make it "difficult and unlikely" for other shareholders to have influence over any votes on company business, adding Cathexis may take actions which could be to the "potential detriment" of ISG shareholders.
Shares in ISG were down 2.8% to 168.00 pence on Wednesday morning.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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