Increased Cash Offer

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

INCREASED CASH OFFER FOR ISG PLC

at

171 PENCE PER ISG SHARE

by

CATHEXIS UK HOLDINGS LIMITED

Introduction

On 11 December 2015, Cathexis UK Holdings Limited ("Cathexis") announced its intention to make a cash offer at 143 pence per ISG Share to acquire the whole of the issued and to be issued share capital of ISG not already held by Cathexis Holdings and its wholly owned subsidiaries to be implemented by means of a takeover offer within the meaning of Part 28 of the Companies Act 2006 (the "Offer"). An offer document setting out the full terms and conditions of the Offer (the "Original Offer Document") and a Form of Acceptance were posted to ISG Shareholders on 19 December 2015.

On 19 January 2016, Cathexis published and posted a circular to ISG Shareholders (the "Response Document") containing, inter alia, its response to comments made by the ISG Board in its revised defence document published on 30 December 2015 and highlighting the ongoing risks of an investment in ISG Shares were they to remain admitted to trading on AIM.

Cathexis is today pleased to announce an increase to the Offer (the "Increased Offer") to 171 pence per ISG Share (the "Increased Offer Price").

The Increased Offer

Under the Increased Offer, Cathexis is offering to acquire, subject to the terms set out in full in Appendix 1 to the Original Offer Document, the entire issued and to be issued share capital of ISG not already held by Cathexis Holdings and its wholly owned subsidiaries on the following basis:

for each ISG Share: 171 pence in cash

The Increased Offer Price values the entire issued share capital of ISG at approximately £84.6 million in aggregate and represents:

· a premium of approximately 40.2 per cent. to the Closing Price of 122 pence per ISG Share on 10 December 2015, being the last Business Day before the date of the Rule 2.7 Announcement;

· a premium of approximately 17.5 per cent. to the Closing Price of 145.5 pence per ISG Share on 28 January 2016, being the last Business Day prior to this announcement; and

· an additional 28 pence per ISG Share to the original Offer Price of 143 pence per ISG Share, a 19.6 per cent. increase.

The Increased Offer is final and will not be increased further (except that Cathexis reserves the right to revise and/or increase the Increased Offer, in accordance with paragraph 1(f) and 1(g) of Part B of Appendix 1 to the Original Offer Document, if a competitive situation (as determined by the Panel) arises or ISG announces material information, of the kind referred to in Rule 31.9 of the City Code after Day 39 of the Offer). Cathexis notes that Day 39 of the Offer was Wednesday, 27 January 2016.

Save as set out in this announcement, the Increased Offer will be subject to the same terms and conditions as the Offer set out in the Original Offer Document. The Increased Offer will be a revision to the Offer and shall be construed accordingly.

In accordance with Rule 32.1 of the City Code, a revised offer document (the "Increased Offer Document") containing details of the Increased Offer will be sent to ISG Shareholders by no later than 3 February 2016. The Increased Offer Document will also be made available on Cathexis' website at: www.cathexisinfo.com

ISG Shareholders who have previously validly accepted the Offer (and have not withdrawn those acceptances) will automatically be deemed to have accepted the Increased Offer by virtue of their prior acceptances and therefore need take no further action. For the avoidance of doubt, all ISG Shareholders that accepted the Offer will receive the Increased Offer Price in respect of their ISG Shares.

Financing the Increased Offer

The Increased Offer will be financed from the existing cash resources of the Cathexis Group.

Altium, as financial adviser to Cathexis, is satisfied that sufficient cash resources are available to Cathexis to satisfy the cash consideration payable to ISG Shareholders in the event of full acceptance of the Increased Offer.

ISG Share Plans

The Increased Offer shall extend to any ISG Shares which are unconditionally allotted or issued and fully paid under the ISG Share Plans before the date on which the Increased Offer closes.

If the Increased Offer becomes unconditional in all respects, Cathexis intends to make such appropriate proposals as it is required to make pursuant to Rule 15 of the City Code to participants in the ISG Share Plans.

Acceptances

As at 1.00 p.m. (London time) on 28 January 2016, Cathexis had received valid acceptances of the Offer in respect of 844,422 ISG Shares, representing approximately 1.70 per cent. of the issued share capital of ISG, which Cathexis may count towards satisfaction of the Acceptance Condition of the Increased Offer. No acceptances had been received from ISG Shareholders acting in concert with Cathexis.

In addition, as at 1.00 p.m. (London time) on 28 January 2016, the following concert parties of Cathexis, being wholly owned subsidiaries of Cathexis Holdings, had an interest in relevant securities of ISG as follows:

Accordingly, as at 1.00 p.m. (London time) on 28 January 2016, Cathexis Holdings and its wholly owned subsidiaries either owned or Cathexis had received valid acceptances of the Offer in respect of a total of 15,456,765 ISG Shares, representing approximately 31.24 per cent. of the current issued share capital of ISG, all of which may count towards the satisfaction of the Acceptance Condition of the Increased Offer.

Closing Date of the Increased Offer

Cathexis announces that the Increased Offer will remain open for acceptance until 1.00 p.m. (London time) on 17 February 2016 which will be at least 14 days following the date on which the Increased Offer Document is published (or such later date as Cathexis may determine with the agreement of the Panel).

ISG Shareholders who have not yet accepted the Offer and who wish to accept the Increased Offer are urged to do so as soon as possible and, in any event, by no later than 1.00 p.m. (London time) on 17 February 2016.

The Increased Offer will not be extended beyond 1.00 p.m. (London Time) on 17 February 2016, unless by that time another person has announced a firm intention to make an offer for ISG pursuant to the City Code.

Cancellation of trading on AIM, compulsory acquisition and re-registration

If the Increased Offer becomes, or is declared, unconditional in all respects and Cathexis receives valid acceptances in respect of ISG Shares which, together with the ISG Shares owned, or agreed to be acquired, before or during the Offer and the Increased Offer by Cathexis and its concert parties, represent not less than 75 per cent. of the voting rights attaching to the ISG Shares, Cathexis intends to procure that ISG will make an application for the cancellation of the admission to trading on AIM of the ISG Shares.

If such an application is made, it is expected that cancellation of admission to trading on AIM will take effect no earlier than 20 Business Days after the date on which Cathexis have, by virtue of their shareholdings and acceptances of the Offer and the Increased Offer, acquired, or agreed to acquire, 75 per cent. of the voting rights attaching to the ISG Shares. Cathexis will request that ISG makes a regulatory announcement when the necessary 75 per cent. threshold has been reached confirming that the notice period has commenced and the anticipated date of cancellation.

Cancellation of the admission to trading on AIM is likely to reduce significantly the liquidity and marketability of any ISG Shares in respect of which the Increased Offer has not at such time been accepted.

If the Increased Offer becomes, or is declared, unconditional in all respects and Cathexis receives acceptances of the Increased Offer in respect of, and/or otherwise acquires (together with those acting in concert with it), 90 per cent. or more of the ISG Shares to which the Increased Offer relates and 90 per cent. or more of the voting rights attaching to such shares, Cathexis intends to exercise its rights pursuant to sections 974 to 991 of the 2006 Act to acquire compulsorily, on the same terms as the Offer, the remaining ISG Shares in respect of which the Increased Offer has not at such time been accepted.

It is also intended that, if the Increased Offer becomes, or is declared, unconditional in all respects, and Cathexis receives valid acceptances in respect of ISG Shares which, together with the ISG Shares acquired, or agreed to be acquired, before or during the Offer and the Increased  Offer by Cathexis, represent not less than 75 per cent. of the voting rights attaching to the ISG Shares, Cathexis will seek to re-register ISG as a private limited company.

General

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

Save as set out in this announcement, the Increased Offer will be subject to the same terms and conditions as the Offer set out in the Original Offer Document. Accordingly, your attention is drawn to the Original Offer Document, which is available on Cathexis' website at www.cathexisinfo.com

References to the existing issued ordinary share capital of ISG and the existing issued ISG Shares are to the number of ISG Shares in issue as at 11 December 2015 (as disclosed in the regulatory announcement released by ISG on that date pursuant to Rule 2.10 of the City Code) which was 49,483,864 ISG Shares.

Unless otherwise stated, all Closing Prices have been derived from the AIM Appendix to the London Stock Exchange Daily Official List.

Terms and expressions used in this announcement shall, unless otherwise defined herein and save as the context otherwise requires, have the same meanings as given to them in the Original Offer Document

Enquiries: 

Altium (Financial adviser to Cathexis) Tel: +44 (0)207 484 4040

Stephen Georgiadis / Tim Richardson

IMPORTANT NOTES

Disclaimer

Altium Capital Limited ("Altium"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Cathexis and no-one else in connection with the matters referred to in this announcement and will not regard any other person as its client in relation to such matters and will not be responsible to anyone other than Cathexis for providing the protections afforded to clients of Altium, nor for providing advice in relation to any matter referred to in this announcement.

Responsibility statement

The Cathexis Directors accept responsibility for the information contained in this announcement relating to Cathexis, save that the only responsibility accepted by the Cathexis Directors in respect of the information in this announcement relating to the ISG Group, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. To the best of the knowledge and belief of the Cathexis Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

Overseas jurisdictions

The release, publication or distribution of this announcement in, and the availability of the Offer to persons who are residents, citizens or nationals of, jurisdictions other than the United Kingdom may be restricted by laws and/or regulations of those jurisdictions. Therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. In particular, copies of this announcement and any formal documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Unless otherwise permitted by applicable law and regulation, the Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

This announcement has been prepared for the purpose of complying with English law, the City Code and the AIM Rules, and information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.

Dealing and Opening Position Disclosure requirements

Under Rule 8.3(a) of the City Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) ISG and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of ISG or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of ISG or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of ISG or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) ISG and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code.

Opening Position Disclosures must also be made by ISG and by any offeror and Dealing Disclosures must also be made by ISG, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the City Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website

A copy of this announcement will, subject to certain restrictions relating to persons resident in Restricted Jurisdiction, be made available on Cathexis' website at www.cathexisinfo.com by no later than 12 noon (London time) on 30 January 2016, pursuant to Rule 26.1 of the City Code. The contents of the website referred to in this announcement are not incorporated into, and do not form part of, this announcement.