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IT staffing and solutions firm CTG rejects offer to be acquired

August 30, 2019

CTG’s (NASDAQ: CTG) board reported Thursday that it rejected Assurance Global Services’ unsolicited offer to buy the firm for $6 per share. The board said the proposed deal undervalued CTG, which is based in Buffalo, New York, and provides IT recruitment and solutions in the US and Europe.

It noted that board members considered proposals by Assurance Global Services on May 21 and July 10.

“After deliberate and thorough consideration, it is the unanimous view of the board that Assurance Global Services’ unsolicited and conditional proposal significantly undervalues CTG, does not reflect the meaningful transformational efforts underway and is not in the best interest of CTG shareholders,” according to an open letter to Assurance Global Services.

The board said CTG is in the process of implementing a plan to drive long-term growth and is shifting to higher-margin solutions business.

“Given the ongoing transition is well underway, CTG is at a crucial point in its turnaround and is well-positioned to increase profitability through the continued execution of our strategy,” according to the letter. “Your proposal range represents a price that was 14% - 18% below our 52-week high, and therefore we believe you are failing to recognize our recent progress and opportunities for near-term value creation.”

While CTG announced it rejected the deal yesterday, the open letter to Assurance Global Services was sent on July 23.

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