IP Group suitor Railpen pulls out of talks for takeover offer
Railways Pension Trustee Co Ltd on Monday said it won't make an offer for IP Group PLC, saying several months of negotiations have failed to yield an agreement.
"Railpen has engaged in discussions with the board of IP Group for several months but has been unable to reach agreement with the board on the terms of a mutually acceptable proposal," it said in a stock exchange notice early Monday.
Railpen is the manager of the Railways Pension Scheme, which has more than 350,000 active and retired members from more than 150 rail companies in the UK. IP Group is an investor in the science and technology sectors. Both are based in London.
Earlier in July, Railpen made a sweetened proposal, following "a significant amount of time meeting with shareholders and the IP Group board". Its final bid was for 61p per share in cash for each IP Group share, a pro rata share of IP's stake in Oxford Nanopore Technologies PLC, valued at 10.6p per share, and a contingent value right of up to 11.3p per IP share. Overall, the offer valued IP shares at 82.9 pence each including the contingent right, around £752 million overall.
IP Group shares were down 0.2% at 66.30 pence early Monday in London, giving the company a market capitalisation of £585.7 million. The stock is up 22% over the past 12 months.
IP in response at the time said the Railpen offer "continues to significantly undervalue the company, its unique framework of origination capabilities and its future prospects".
On Monday, IP Group said: "Throughout the process, the board has sought to engage constructively with Railpen and its partners, recognising its fiduciary duty to maximise value for all shareholders. The board had granted an extension to the [put-up-or-shut-up] deadline in order to assess whether an acceptable proposal could be tabled on terms that the board would be minded to recommend.
"The board appreciates the engagement and effort from Railpen and its partners and is disappointed that a mutually acceptable outcome could not be reached."
IP Group added: "The board has strong conviction in IP Group's strategy and the opportunity to realise substantial value from its high-quality portfolio with a significant number of potentially value-accretive milestones anticipated over the next 18 months."
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