Forge rejects Clough takeover offer

The independent directors of Forge Group have recommended shareholders to not accept a proportional takeover offer by Clough, although the executive directors will stick to their previous commitment and accept the offer.

The recommendation comes on the back of independent expert, RSM Bird Cameron, concluding the offer of $2.10 cash per Forge share, to achieve a maximum 56.5 per cent shareholding, was not fair or reasonable.

As a result, the independent Forge directors urged shareholders to reject the offer, with other directors abstaining from giving a recommendation.

Since Clough unveiled its offer last month, Forge shares have climbed from $2.19 to a high of $2.99.

RSM's said it valued Forge shares at a range between $3.74 and $4.13

Forge shareholders have given some support to Clough following a meeting last week when a $19.5 million share placement to Clough was approved. That was despite the late emergence of a higher, competing proposal which was pitched by an undisclosed ASX 100 company.

The undisclosed bidder last week dropped its takeover proposal.

Clough currently holds a 13 per cent shareholding in Forge and is poised to increase it to 31 per cent after certain major shareholders and executive directors previously indicated their intention of accepting the offer for 50 per cent of their shares.

In the target statement released today, Forge managing director Peter Hutchinson confirmed he would be accepting Clough's offer.

Their acceptance will trigger the strategic alliance between the companies that will allow both to leverage complementary services in the oil and gas, mining and civil infrastructure services.

In a statement issued later this afternoon, Clough noted the independent directors recommendation and said it remained confident the alliance will go ahead.

Shares in Clough were unchanged at 92 cents while shares in Forge were 30c higher at $2.88 at 15:53 AEST.