TIDMIPO TIDMIVO
RNS Number : 9310F
IP Group PLC
23 May 2017
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES OR
IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT
JURISDICTION.
THIS IS AN ANNOUNCEMENT OF A POSSIBLE OFFER UNDER RULE 2.4 OF
THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE"). THIS
ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN
OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT
AN OFFER WILL BE MADE.
THIS ANNOUNCEMENT CONSTITUTES INSIDE INFORMATION AS STIPULATED
UNDER THE MARKET ABUSE REGULATION (EU) NO.596/2014
IP Group plc ("IP Group" or the "Company") - possible offer for
Touchstone Innovations plc ("Touchstone")
Introduction
IP Group announces that it recently made an approach to the
Board of Touchstone regarding a possible combination with
Touchstone (the "Combination"). The Board of Touchstone rejected
the proposed Combination.
IP Group is also announcing today that it intends to raise gross
proceeds of up to GBP200m through the issue of new IP Group shares
at a price of 140 pence per share pursuant to a firm placing,
placing, open offer and offer for subscription (the "Capital
Raise"). The Combination is not conditional on the completion of
the Capital Raise and the Capital Raise is not conditional on the
completion of the Combination.
IP Group is required to make this announcement regarding the
Combination ahead of the announcement of the Capital Raise.
The IP Group Directors consider that the Combination would
create an international leader in IP commercialisation and an
enlarged business with substantial capabilities that would be
greater than the sum of the two parts. The Combination would allow
both the Company's and Touchstone's shareholders to participate in
any future value generated by the enlarged Group and its more
diversified portfolio.
The possible all-share offer for Touchstone is being considered
on the basis of the terms set out below (the "Possible Offer"). IP
Group has received support for the Possible Offer from Touchstone
shareholders representing, in aggregate, 51.8 per cent of
Touchstone's issued share capital (further details of the
irrevocable undertaking and letters of intent are set out in
Schedule 1).
The IP Group Directors look forward to further engagement with
Touchstone regarding this proposal.
The Possible Offer
The terms of the Possible Offer would comprise the issue of
2.1490 IP Group shares for each Touchstone share, subject to
adjustment as set out below (the "Exchange Ratio") which, prior to
the Capital Raise:
-- would result in Touchstone shareholders owning approximately
38 per cent of the enlarged share capital of IP Group; and
-- implies an offer value of 307 pence per Touchstone share,
based on IP Group's closing share price of 143 pence on 22 May
2017.
The Exchange Ratio will be adjusted:
1. following admission and settlement of the new IP Group shares
issued pursuant to the Capital Raise, to take into account the
scale of the Capital Raise and the 2.1 per cent discount offered on
IP Group shares offered as part of the Capital Raise. For example,
if the amount raised by the Capital Raise is GBP200 million at 140
pence per IP Group share:
a) the Exchange Ratio would increase to 2.1581;
b) Touchstone shareholders would own approximately 33 per cent
of the enlarged share capital of IP Group; and
c) on the basis of the closing IP Group share price on 22 May
2017, the implied offer value would remain 307 pence per Touchstone
share,
2. if, as a result of an increase in the IP Group share price,
the implied offer value per Touchstone share were to become worth
more than 320 pence (the "Offer Cap"). In such event, the number of
IP Group shares to be issued per Touchstone share will be reduced
such that the implied offer value per Touchstone share remains at
320 pence. The IP Group share price used for this adjustment will
be calculated by reference to the volume weighted average price of
an IP Group share over a set period.
The mechanics for the amendment of the Exchange Ratio under
adjustment (2) above (including the date when it will be made) will
be described fully in any announcement of a firm offer for
Touchstone made under Rule 2.7 of the Code, if and when made. The
Offer Cap is not a no increase statement and should not be taken to
mean that the Exchange Ratio or Offer Cap cannot be increased in
any announcement of a firm intention to make an offer pursuant to
Rule 2.7 of the Code.
Background to and reasons for the Possible Offer
The IP Group Directors consider that the combination of
Touchstone and IP Group would create an international leader in IP
commercialisation and a combined business with substantial
capabilities that is greater than the sum of the two parts.
Specifically, the IP Group Directors believe that a combination
with Touchstone would provide the combined group with the following
key benefits:
1. An enlarged platform for growth and investment;
2. A larger portfolio with diversification across sectors and maturity of assets;
3. An experienced team with complementary industry backgrounds; and
4. Access to IP developed at Imperial College London and
University College London adding to IP Group's existing
partnerships with other leading UK research universities.
Management and employees
IP Group attaches great importance to the skills, knowledge and
expertise of the existing management and employees of both
companies. IP Group believes that the combined group will lead to
opportunities for employees from both companies to progress in a
business of greater scale.
IP Group confirms that it intends to safeguard fully the
existing employment and pension rights of the management and
employees of both companies in accordance with applicable law.
General and reservations to the Possible Offer
Under Rule 2.6(a) of the Code, IP Group must, by 5:00pm on 20
June 2017, either announce a firm intention to make an offer in
accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer, in which case the announcement will be
treated as a statement to which Rule 2.8 of the Code applies. This
deadline will only be extended with the consent of the Takeover
Panel in accordance with Rule 2.6(c) of the Code.
IP Group reserves the right to make an offer on less favourable
terms than those set out in this announcement in the event
that:
i. an agreement or recommendation in respect of such terms is
reached with the Board of Touchstone; or
ii. an offer or possible offer for Touchstone is announced by a third party.
In the event Touchstone announces, declares, pays or makes any
dividend or distribution to Touchstone shareholders at any time, IP
Group reserves the right to make an equivalent reduction in the
terms of the Possible Offer.
In addition, IP Group reserves the right to introduce other
forms of consideration and/or vary the proposed mix of
consideration in any offer.
The Directors of IP Group accept responsibility for the
information contained in this announcement. To the best of the
knowledge and belief of the IP Group Directors (who have taken all
reasonable care to ensure that such is the case), the information
contained in this document for which they are responsible is in
accordance with the facts and does not omit anything likely to
affect the import of such information.
For further information contact:
IP Group plc
Alan Aubrey, Chief Executive
Officer +44 (0) 20 7444 0050
Greg Smith, Chief Financial
Officer +44 (0) 20 7444 0070
+44 (0) 20 7444 0062/+44
Liz Vaughan-Adams, Communications (0) 7979 853802
Numis Securities Limited
(Joint Financial Adviser +44(0) 20 7260
and Broker) 1000
Michael Meade
James Black
Freddie Barnfield
Rothschild (Joint Financial +44 (0) 20 7280
Adviser) 5000
Warner Mandel
Anton Black
Charlotte Street Partners
Andrew Wilson +44 (0) 7810 636995
Martha Walsh +44 (0) 7876 245962
Important notices
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities whether pursuant to this
announcement or otherwise. This announcement does not constitute a
prospectus or a prospectus equivalent document. The shareholders of
IP Group and Touchstone are advised to read carefully the formal
documentation in relation to the Possible Offer once it has been
despatched.
Overseas jurisdictions
The release, publication or distribution of this announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe any applicable requirements. This announcement
has been prepared for the purposes of complying with English law
and the Code and the information disclosed in this announcement may
not be the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom.
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States of America.
This announcement is not an offer of securities for sale into the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1993, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication of this announcement
In accordance with Rule 26.1 of the Code, a copy of this
announcement will be available on the website of IP Group at
www.ipgroupplc.com/investor-relations/ by no later than 12 noon
(London time) on the business day following this announcement. The
content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement. A
further announcement will be made by IP Group as and when
appropriate.
Forward-looking statements
This announcement may contain certain "forward-looking
statements". The forward-looking statements contained in this
announcement include statements relating to IP Group's proposal to
the Board of Touchstone, and other statements other than historical
facts. Forward-looking statements often use words such as
"believe", "expect", "estimate", "intend", "anticipate" and words
of a similar meaning. You should not place undue reliance on these
forward-looking statements, which reflect the current views of IP
Group, are subject to risks and uncertainties about Touchstone and
are dependent on many factors, some of which are outside of the
control of IP Group. There are important factors, risks and
uncertainties that could cause actual outcomes and results to be
materially different, including that there can be no certainty that
the approach in respect of the proposed transaction described in
this announcement will result in a formal offer, nor as to the
terms on which any such offer may be made. Except as required by
law, IP Group undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
N M Rothschild & Sons Limited ("Rothschild"), which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, is acting exclusively for IP Group and for no one
else in connection with the subject matter of this announcement and
Rothschild will not be responsible to anyone other than IP Group
for providing the protections afforded to its clients or for
providing advice in connection with the subject matter of this
announcement.
Numis Securities Limited ("Numis") which is authorised and
regulated by the Financial Conduct Authority is acting exclusively
for IP Group and no-one else in connection with the subject matter
of this announcement and Numis will not be responsible to anyone
other than IP Group for providing the protections afforded to its
clients or for providing advice in connection with the subject
matter of this announcement.
Schedule 1
In accordance with Rule 2.10 of the Code, the Company announces
that Woodford Investment Management Ltd has entered into a hard
irrevocable undertaking in favour of the Company representing a
shareholding of approximately 10.0 per cent in Touchstone to vote
in favour of or accept any offer which is made by the Company (the
"Irrevocable Undertaking"). Further details regarding the
Irrevocable Undertaking are set out below.
The Company has also received a non-binding letter of intent
from Woodford Investment Management Ltd in favour of the Company
representing approximately 12.8 per cent of the share capital of
Touchstone in issue on 31 January 2017.
In addition, the Company has received a non-binding letter of
intent from Invesco Asset Management Ltd in favour of the Company
representing approximately 29.0 per cent of the share capital of
Touchstone in issue on 31 January 2017.
The Irrevocable Undertaking and the letters of intent in favour
of the Company represent total shareholdings of approximately 51.8
per cent in Touchstone to vote in favour of, or accept, any offer
which is made by the Company.
The Irrevocable Undertaking remains binding in the event of a
higher, or any other, bid or offer for Touchstone.
The Irrevocable Undertaking will cease to be binding if, among
other things:
i. the Company announces, with the consent of the Panel, and
before the publication of any document containing details of any
takeover offer within the meaning of section 974 of the Companies
Act 2006 or the publication of any document to be sent to
Touchstone shareholders containing amongst other things, details of
any proposed scheme of arrangement under Part 26 of the Companies
Act 2006 between Touchstone and Touchstone's shareholders in
connection with any offer by the Company, that it does not intend
to proceed with the Possible Offer and no new, revised or
replacement scheme of arrangement or takeover offer is announced by
the Company in accordance with Rule 2.7 of the Code;
ii. the takeover offer (or scheme of arrangement as applicable)
does not become effective, is withdrawn or lapses in accordance
with its terms, save for where the Possible Offer is withdrawn or
lapses solely as a result of the Company exercising its right to
implement the Possible Offer by way of takeover offer rather than a
scheme of arrangement or vice versa or any competing offer is made
which is declared wholly unconditional or otherwise becomes
effective.
Name of Touchstone Number of Touchstone Percentage of
shareholder shares over which Touchstone issued
undertaking is share capital
given as at 31 January
2017
--------------------- --------------------- -------------------
Woodford Investment
Management Ltd 16,120,413 10.0000
--------------------- --------------------- -------------------
Name of Touchstone Number of Touchstone Percentage of
shareholder shares over which Touchstone issued
letter of intent share capital
is given as at 31 January
2017
-------------------------- --------------------- -------------------
Woodford Investment
Management Ltd 20,636,738 12.8016
-------------------------- --------------------- -------------------
Invesco Asset Management
Ltd 46,750,000 29.0005
-------------------------- --------------------- -------------------
Schedule 2
Bases and sources
In this announcement:
i. Unless otherwise stated, all prices for IP Group shares are
the closing price for the relevant date provided by the London
Stock Exchange.
ii. References to the existing issued share capital of IP Group
are to the number of IP Group shares in issue as at 22 May 2017,
being the last Business Day prior to the date of this announcement,
which was 565,221,967 IP Group shares. The international securities
identification number for the IP Group shares is GB00B128J450.
iii. References to the existing issued share capital of
Touchstone are to the number of Touchstone shares in issue as at 31
January 2017 and taken from Touchstone's results for the six months
ended 31 January 2017, published on 31 March 2017, which was
161,204,124 Touchstone shares. The international securities
identification number for the Touchstone shares is
GB00B170L953.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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