The struggling contractor confirmed it would be writing to shareholders setting out why they must reject the bid from Cathexis.

This morning ISG warned that Cathexis was an astute investor, which had bought shares at times when its price was low and now saw further value at ISG shareholders expense.

It added that the £71m offer did not represent an adequate premium for control of ISG and warned dividend could be at risk if it seized control. 

Roy Dantzic, chairman of ISG said: “Cathexis is an astute investor which has shrewdly built up its shareholding in ISG. 

“The board urges shareholders not to give away your value in ISG at today’s inadequate offer price.”

The bid offers shareholders 143p a share and represents a 17% premium to pre-offer price, which ISG’s board has dismissed as failing to reflect the recent growth and future potential of its core fit out businesses.

Shareholders now have until 11 January to decide whether to accept the offer.

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

The Texan investor 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 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.