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 鈥� raising the valuation from 拢71m to 拢85m 鈥� 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鈥� shareholding stays below 50%, it would be 鈥渟uch a significant minority shareholder that it would be extremely difficult and unlikely for other shareholders to have influence in any shareholder vote鈥�.
It added: 鈥淎s such, Cathexis could take actions that may be to the potential detriment of shareholders.
鈥淭he 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.鈥�
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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