IP Group rejects ‘final’ takeover proposal from Railpen
IP Group PLC on Tuesday confirmed that it recently received an acquisition proposal from Railways Pension Trustee Co Ltd through its subsidiary, Railway Pension Investments Ltd.
Shares in IP Group were 1.4% higher at 65.90 pence each in London on Tuesday afternoon.
Under the ‘preliminary and highly conditional’ possible offer, IP Group shareholders would be entitled to 59.0p in cash per share; the indirect value of its Oxford Nanopore Technologies PLC stake through a dividend in specie; and a contingent value right of up to 5p per share.
The latter would comprise 3p per share payable if IP Group’s stake in Istesso was sold within 12 months of the completion of Railpen’s offer, and if the gross proceeds were equal to or more than £98 million; and another 2p per share if the gross proceeds exceeded £200 million.
IP Group, a London-based investor in the science and technology sector, said Railpen described the offer as ‘final’ and said a consortium would have to be formed to deliver a firm offer.
It said the proposal, excluding the CVR, values it at 69.4p per share. This implies a value for all outstanding shares of £613.1 million.
The per share offer represents a premium of approximately 6.7% to the stock’s closing price on Monday, and a discount of approximately 37.2% to its net asset value per share of 110.4p as of December 31.
IP Group said its board unanimously rejected the proposal, having ‘carefully considered’ it and determined that it ‘materially undervalued the company, its unique framework of origination capabilities and its future prospects.’
The firm had previously unanimously rejected three previous indicative offers due to ‘concerns around value, structure and deliverability’.
On Monday, Railpen said IP Group had turned down a possible offer implying a total value of £615.8 million, or 69.7p per share, with the potential to get up to an extra 5p per share through a contingent value right.
Railpen currently holds an 18.38% stake in IPGroup.
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