Investor defends against IP Group takeover

Touchstone is escalating its defence against a hostile takeover by FTSE250-listed IP Group, despite the acquisition having the support of the group’s founding university and three major shareholders.

Along with Touchstone’s founding university, Imperial College, investor Neil Woodford, hedge fund Lansdowne and institution Invesco, the deal currently has 89.7% shareholder support.

Despite this, science investor Touchstone’s board has reiterated its position against the bid. Chairman David Newman insists that they continue to “fundamentally undervalue” the business.

He may be fighting a losing battle however, as its rival already has the 75% it needs to enable it to delist Touchstone.

Last month IP upped its bid to £490m, from an initial £466m bid as it sought to win over the company after a share price crash which saw the bid value decline to below £400m. IP is offering 2.2178 of its own shares for each Touchstone share.

But Newman has continued to lead the revolt against it, according to the Telegraph, urging the final shareholders to not accept the deal so it cannot be considered wholly unconditional – at 90%.

He has said that Touchstone has more mature investments than IP, with its biggest asset representing 37% of its portfolio, in comparison with Touchstone, whose biggest investment reaches 11%.

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.

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