IP Group waits for competition watchdog’s verdict on £490m Touchstone takeover

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FTSE250-listed IP Group, which is awaiting approval from the Competitions and Markets Authority for its verdict on the £490m takeover of Touchstone, has said the first phase review is anticipated to “start shortly”.

IP Group, which upped its offer to £490m in July from the initial £466m it had initially bid for the early-stage technology investment company, also announced it has now secured a minor amount of funds from Beijing Galaxy World Group Co.

“The proposed transaction is currently in the final stages of the pre-notification process with the CMA following which the formal 40 business day Phase 1 review period by the CMA shall commence. This is anticipated to occur shortly,” the group said.

The offer timetable has been frozen while the CMA review is completed, and as a result IP Group said if the offer has not become unconditional by securing the relevant level of acceptances needed by October 6, then those Touchstone shareholders that have accepted the offer will be entitled to withdraw the acceptance by written notice.

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 an agreement with the board was not reached.

But 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.

Meanwhile, IP Group said it has now issued 556,427 new shares to Beijing Galaxy World Group for 140 pence each, totalling £800,000.

The Chinese firm had originally subscribed to 16.5 million shares for £23.1 million under a placing, but had to cancel the purchase as it was unable to move the required funds due to exchange restrictions in China.

“Beijing Galaxy has now subscribed to the shares, albeit much less than it first intended buying, after sourcing offshore funds that are not subject to the exchange controls. IP Group did not state that Beijing Galaxy would purchase any more shares in the company under the original agreement, but said “Galaxy World and IP Group will continue to explore future collaboration opportunities,” IP Group said.

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