ISG rejects £71m bid by Texan raider

Aaron Morby 8 years ago
Share

The board of ISG has rejected a £71m offer for the struggling contractor by a majority shareholder.

Texan investment company Cathexis has built a 29.5% stake in the company in recent years as ISG struggled with losses on legacy contracts.

The firm has now staged a takeover bid offering shareholders 143p a share, a premium of 17%, valuing the offer at £70.8m.

But ISG said: “The Board is unanimous in its rejection of the offer of 143 pence per share which it believes significantly undervalues ISG and its future prospects.”

Roy Dantzic, Non-Executive Chairman of ISG said: “Cathexis’ offer is unsolicited and totally inadequate.

“Disappointing trading conditions in our UK Construction divisions aside, it fails to reflect the strong trading conditions and outlook for the rest of our business.

“As such the Board urges ISG shareholders to reject this offer once made.”

In a statement Friday morning Cathexis said taking ISG private would allow it to reduce the inherent risks falling on the construction business which was prone to extraordinary losses from time to time.

ISG shares jumped 15% to 141p after the approach.

Cathexis suggested there would be few changes at the top if shareholder accept adding that it attached “great importance to the skills, expertise and knowledge of the existing management and employees of ISG.”

The firm said it would conduct with management a strategic and operational review of the existing resources of ISG to identify opportunities.

Cathexis Group first approached the ISG board in June, but its offer was rejected as very significantly undervaluing the contractor.

But following a recent ISG profit warning Cathexis has decided to appeal directly to ISG shareholders.

ISG reported a £28m loss in the year ended 30 June 2015 on revenue of £1.6bn, with consolidated net assets of £57m.

Earlier this month, the firm issued a profit warning that its poorly performing construction division was expected to run up a loss of £5m in the first half of the year.

The outlook for its fit-out and engineering service divisions remained good.

Cathexis said it had no plan to change the location of ISG’s places of business or to redeploy employees.

Latest news

Plan in for £3bn Lincolnshire mega data centre

3.3m sq ft Humber Tech Park will be one of Europe's largest data centres
23 hours ago

Green light for Digbeth 1,300 homes scheme

Warner’s Fields scheme to start with excavation and landscaping of the River Rea
23 hours ago

Flagship biodiversity net gain scheme flawed

NAO warns Government's flagship green development scheme at risk of failure
22 hours ago

£210m M3 Junction 9 upgrade gains consent

VolkerFitzpatrick to start work in early 2025 on Winnall roundabout, near Winchester
23 hours ago

United Living wins 14-year L&Q homes repairs deal

Trafford housing upkeep deal worth £205m
23 hours ago

£400m Lewisham resi-led scheme advances

Land deal paves way for Amro Partners' 1,000-home London scheme
23 hours ago

McLaren gets go-ahead for Grade II listed Leeds student scheme

Springfield House to be revamped and two new wings added
24 hours ago

Piling giant to fit people alarms on all rigs

Cementation Skanska upgrades site safety systems
1 day ago

Vistry to make £800m profit after subcontractor cost cuts

House builder bullish about shareholder returns after asking suppliers for discounts
2 days ago

Shareholders approve £2.5bn Barratt and Redrow merger

Final hurdle is for the competition regulator to approve the deal.
2 days ago

Green light for £80m Leith waterfront revamp

Build-to-rent homes and student accommodation scheme to be built
2 days ago

Tilbury Douglas clears Interserve legacy jobs to return to profit

Revenue tops £500m in first year as standalone contractor
3 days ago

Land deal paves way for Manchester civil service office hub

Government buys five acres at former Central Retail Park
2 days ago

Speller Metcalfe wins Wolverhampton library upgrade

Full works are due to start in the autumn
2 days ago

Skills shortage puts big infrastructure projects at risk

Government failing as an intelligent client and now over-reliant on consultancies
3 days ago

Contractors face further insulation board price hikes

Cost of PIR insulation boards set to rise another 10%
3 days ago

Henry Boot wins £36m Rotherham Markets job

Project involves upgrading existing market and building a new library
3 days ago

Keltbray hires new head of infrastructure procurement

Lukasz Olszewski will oversee rail, energy and highways business units
3 days ago

Tunnel fit out robot to revolutionise civils work

Costain and VVB Engineering part of innovative consortium
3 days ago

Funding deal for £86m wind turbine test centre

Latest investment at National Renewable Energy Centre in Blyth
4 days ago

Plan in for Manchester ‘upside-down’ 18-storey tower

Landmark cantilevered NXQ building plan for city Northern Quarter
4 days ago

London 25km Super Sewer hooked up for commissioning

Tideway completes connection to existing Lee Tunnel sewer system
4 days ago

£200m Lincoln ring-road approved

North Hykeham Relief Road granted planning permission
4 days ago

£1bn Manchester Airport City plan rebooted as new sci-tech hub

Plan pivots from offices to science and manufacturing campus, called MIX Manchester
5 days ago

Record results at maintenance specialist Renew

Infrastructure maintenance work continues to pay off for contractor
4 days ago

Barhale lands £21m shaft scheme for Thames Water

Civils specialist bags latest upgrade deal on Thames Water Ring Main
4 days ago

Caddick names new north east director

Former Laing O'Rourke project lead joins Yorkshire contractor
4 days ago

Mount Anvil wins London Camden estate rebuild

Deverloper wins £133m Bacton Phase 2 development in Gospel Oak
5 days ago

London Met Uni seeks firm for £280m estate upgrade

A single partner contractor will deliver 10-year building upgrade plan
5 days ago

Top 30 M&E contractors set for growth – ranking

Growth in data centres and commercial refits creates optimism for year ahead
5 days ago

Contractor services