This morning the majority of the board of engineering, construction, and maintenance services provider UGL Limited (ASX: UGL) recommended its shareholders accept the takeover proposal from construction giant Cimic Group Ltd (ASX: CIM).

Although it wasn’t unanimous, four out of five directors at UGL are in favour of the $3.15 per share offer that CIMIC tabled just under a month ago.

According to the release an independent expert found the value of the company on a 100% controlling interest basis to be in the range of $3.11 to $3.94 per share.

As the offer CIMIC made fell within this range, the independent expert deemed it to be both fair and reasonable.

Non-executive director Robert Kaye was the only director to not recommend the takeover proposal. He has recommended that shareholders reject the proposal, believing that the offer price does not reflect the underlying value of the company. Within the release he provided reasons for this. Firstly the offer price is at the very low end of the range that the expert values the company at. I would agree with Mr Kaye that CIMIC looks like it is getting a bargain at this price.

The next reason he has given is that UGL has a strong ‘base business’ and is well advanced in its turnaround. There’s no denying that times have been hard for UGL, but he is correct in saying that things are improving.

The ‘base business’ does look strong when you consider that 84% of FY 2017 and 50% of FY 2018 revenue has already been committed through contracts secured in the order book.

Mr Kaye also believes the timing of the offer is opportunistic considering the collapse of UGL’s share price in June related to problems at the Ichthys Project.

Finally, he is of the belief that the offer price may not reflect the full strategic value of UGL to CIMIC. After all in its bidder’s statement CIMIC advised that it not only sees UGL as complementary to its existing business, but intends to leverage its capabilities to generate synergies from the transaction.

Although I am not a shareholder and I’m merely outside looking in, my opinion would be that CIMIC shareholders are getting the better deal from this transaction. Mr Kaye makes some valid points and I can fully understand why he did not recommend the proposal.

In light of this I would suggest shareholders read through the target statement provided by management today, before making a decision on whether to accept the offer.

If you do accept the offer I would suggest you take a look at reinvesting your gains in these fast-growing shares. Each has strong earnings growth ahead in my opinion.

Why These 3 Blue Chip Shares Are Set to Soar for Smart Investors

Discover The Motley Fool's Top 3 blue chips for Smart Investors. These 3 'new breed' shares pay fully franked dividends AND offer the prospect of significant capital appreciation. Simply click here to gain access to this comprehensive FREE investment report.

No credit card required!

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.