IP Group ups its bid in hostile takeover plans
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FTSE250-listed IP Group has upped its offer for rival Touchstone Innovations, and secured the backing of the company’s founder Imperial College as it looks to execute a hostile takeover.
IP Group has upped its offer to £490m, from the initial £466m it had initially bid for the company. The share price of both firms fell following the initial announcement in June, sinking the value of the deal.
Based on the closing price of 137p per IP Group share on 17 July 2017 – the last Business Day prior to the announcement – the deal values each Touchstone share at 304p.
If the offer is accepted, Touchstone shareholders would own approximately 34% of the group, and IP Group shareholders would own around 66%.
Both the companies specialise in scientific commercialisation projects. IP Group has offices in Leeds and London and has backed University of Leeds spin-outs Tracsis, Tissue Regenix and Xeros, plus University of Sheffield spin-out Diurnal Group.
The deal for Touchstone initially turned hostile “regarding their concerns around value and people” said IP, and a agreement with the board was not reached.
The IP Group put the offer directly to Imperial College, and it subsequently wrote to support the deal.
However it was always likely to go through, as the offer from IP had the backing of Touchstone’s three biggest shareholders: hedge fund Lansdowne; Invesco, and investor Neil Woodford. Together they own nearly 75% of the group, added to
Alan Aubrey, CEO of IP Group, said: “We welcome Imperial College’s support and remain confident that the enlarged Group will be well placed to build significant shareholder value as we create an international leader in IP commercialisation.”
The Endowment Board of Imperial College London, said: “Since its formation, Touchstone has supported scientists and entrepreneurs in the commercialisation of their ideas.
“As the founding shareholder of Touchstone, we value the efforts of the team in creating a diverse portfolio of businesses based on university intellectual property. We also recognise that this could not have been achieved without our largest co-shareholders, Invesco, Woodford and Lansdowne, and we thank them for their longstanding support.
“We value the Touchstone employees and management and welcome the proposals IP Group has made in that regard. We are supportive of the strategic rationale of this transaction and appreciate the increased value for Touchstone’s shareholders implied by the New Exchange Ratio. As a result of these factors, we would be willing to accept the Improved Offer.”