Ip Share Discussion Threads

[robow] 20/6/2017 23:45

from The Daily Telegraph
IP Group closes in on hostile £466m Touchstone takeover

Science innovation company IP Group is on the cusp of a hostile takeover of rival Touchstone, after making a £466m offer that's already won the backing of close to three quarters of the target firm's shareholders.

Today's offer of 289p per share is lower than that proposed by IP in an approach on May 23, of 307p per share, as the stock value of both firms has slid since then, by 7pc and 4pc respectively.

Touchstone - which had already rebuffed the earlier approach - is expected to hold firm against its rival.

But the FTSE 250 suitor is in a commanding position, as it already has support from Touchstone investors holding 74.3% of its stock, just shy of the 75% level of support needed to make it unconditional.

IP Group said it had tried to win the backing of the Touchstone board but had so far failed to do so.

Touchstone’s investors have also been offered a smaller share of the combined company, 2.1584 IP shares for each Touchstone share, representing 33pc ownership, down from the 38pc stake initially proposed. Today had been the deadline for IP to make a firm offer.

It argues the tie-up will create an international leader in commercialising innovation that is “greater than the sum of the two parts”.

Both companies invest in technology and research in partnership with universities to bring emerging ideas and technology to market.

David Newlands
Touchstone chairman David Newlands has previously said IP Group's approach 'fundamentally' undervalued the business CREDIT: MARINA IMPERI
Alan Aubrey, chief executive of IP Group, said: “We remain open to engagement with the Touchstone board at any point regarding our offer.”

Touchstone declined to comment when approached by The Telegraph shortly after the announcement this afternoon.

IP Group insists it still wants the majority of the Touchstone board to join it after the deal, including chief executive Russ Cummings, despite Touchstone’s board earlier rejecting the approach for “fundamentally” undervaluing the business.

IP Group wants Cummings to join the combined board and remain chief executive of Touchstone, while chief investment officer Nigel Pitchford and executive director Tony Hickson would join an executive committee during the integration period.

Two out of four Touchstone non-exec directors would join the combined board.

IP Group completed a £207m capital raise earlier this month to help fund the deal.

In a letter setting out the reasons for the Touchstone board rejecting the approach on June 1, chairman David Newlands argued it undervalued the firm’s portfolio, its therapeutics assets, and its “unique” relationships with universities including Imperial College London and UCL, and with pharmaceutical firms.

Mr Newlands also said any deal would risk Touchstone losing key staff and relationships and argued the firm had a strong independent future “to drive overall returns and generate cash over the next five years”.

IP Group’s offer represents a modest 4pc premium to Touchstone’s market value the day before the approach was announced.

[bamboo2] 14/6/2017 09:09

A H&S could take this to 125, but prob intraday, and prob a good entry point for lth or a trade. Quite good to see the premium reduced to near zero.

[superg1] 09/6/2017 10:50

I smell something here

In the list they back some companies which seem to get high market caps. Probably due to the heavy backing and repeated backing for some. That creates large holder and tight supplies. Then such companies can fly on hope on news.

That in theory translates into a high market cap here as fair value based on what they are backing.

I have serious concerns about one they back and it seems way too high on the M/C on the back of it.

Further the IPO chief investment officer its on one that has released false news.

I have contacted IPO asking if they are complicit or oblivious either way its not good if you don't know what is going on in a share where you are on the BOD or complicit.

Strong words yes but I can back it up in that case.

Obviously I'm just looking at one in a long list and I'd have to look into the others in more detail which I will do over time.

[davr0s] 06/6/2017 15:35

That's me out - lost all momentum and in danger of making another leg down. Surprised they haven't updated on the fundraising or are they too embarrassed on the take up at 150?

[superg1] 06/6/2017 08:07

Just a thought.

Surely one part of why some public companies they are in carry high values is the nature of their large holding which they don't sell like a fund would.

With 20% plus holdings in some it makes the shares tight and perhaps inflated M/Cs on the back of that.

I'd have to dig through to work out how many are public companies.

[superg1] 02/6/2017 07:57

Funds probably trying to force discount?

Seen it plenty of times before where they will run it down for that reason. That's the trouble of giving a bent market plenty of notice.

[davr0s] 01/6/2017 10:52

See Touchstone has put out a statement re the offer rejection - though IP in fairness said the fund raising would be independent of this offer. But still the price drifts down - whilst I expected a dip to 140 I wasn't expecting it to be languishing below the funding price so close to the deadline - does that suggest it's not getting the take up? I have until lunchtime tomorrow and unless it bounces quickly this is going to be an Easy decision (not) to take it up

[swedeee] 31/5/2017 17:14

exactly DavR0s. deadline today isnt it? not going along on that..

edit: just checked emails and it is 5pm tomorrow.

[davr0s] 31/5/2017 16:57

Market's hardly persuading me to take the offer up. Think I'll wait till close to the deadline as no point buying to something that is falling below the offer price

[superg1] 31/5/2017 11:04

Personally though as IP group are either complicit or ignorant to issues at one company they are invested in how can you trust their comments about others they are invested in. You are relying on their research which does not look very good to me, albeit based on one example.

[superg1] 31/5/2017 10:35

Isn't IPO like a PI chasing all the hot high risk plays. Some will come off and some won't.

I get the valuation as the sum of parts of holdings within the various companies. Clearly Oxford nanopore is a screaming success but in realist very few make it so there will be a number of duff companies IPO are in.

As we know some Aims over the years stand alone have had ridiculous MCs of £400 mill and more with no revenue at all.

[swedeee] 30/5/2017 16:28

why the dip today? thought this was a goer ffs

[superg1] 30/5/2017 15:57

Well one dud its back is AGM if you look deeply into them.

How does the valuation work?

[robow] 25/5/2017 16:43

IP Group upgraded by Jefferies

StockMarketWire.com

Jefferies has upgraded its recommendation on IP Group (LON:IPO) to buy (from (hold) now that the intellectual property commercialisation company announced its intention to raise gross proceeds of up to £200m via a share placing.

The broker said: "Our Hold rating for IP Group was based on the looming funding requirement (est. £100m in each of 17E, 18E) and 30% premium to NAV.

"Removing that funding issue at a stroke, and now at c.14% premium, we move to a Buy."

Jefferies added: "Before factoring in the probable, positive but still pending Touchstone deal we raise our PT to 175p (vs. 169p) based on a $3.5bn Oxford Nanopore valuation."

[p1nkfish] 24/5/2017 18:26

Sorry chap, that's the market.

The cycle is down on Ipo, Ivory and WPCT and whomever can raise the cash and gather the shareholder support eats the others.

[backwoodsman] 24/5/2017 10:17

This article goes on about bullying by the major shareholders.

Being opportunistic given how Touchstone's shareprice is at something of a low. But then so is IPO's.
Somwhat validly, perhaps, it mentions that Oxford Nanopore represents 34% of IP's NAV 'skewed' as a 'big bet'. The fund-raising goes some way to dilute this risk.
Quote:
'You can see his point, too. IP’s having a £200 million fundraising, supposedly to help its fledgling expansion in Australia. But that also dilutes Touchstone investors to a third of the merged group. And for that they’re giving up a presently stronger balance sheet (£148 million cash versus IP’s £112 million) and their 100 per cent exposure to an investment portfolio with, arguably, better prospects. As the Jefferies analyst Ken Rumph points out, IP’s is skewed to a big bet on the private gene sequencer Oxford Nanopore accounting for 34 per cent of group net asset value. Indeed, he rates the IP investment portfolio four out of ten versus 5.3 for Touchstone.
So, maybe that’s why Woodford and co fancy buying it on the cheap and screwing over Touchstone’s minorities. Roll on expertise, reinvented.'

[broadwood] 23/5/2017 16:34

I
P Group has approached Touchstone Innovations with a £500m bid to create an international leader in commercialising innovation.
The FTSE 250 company said that a firm offer could hand Touchstone’s investors 2.1490 IP Group shares for each Touchstone share held, or 38pc of the enlarged group, which would be “greater than the sum of the two parts”.
However IP’s takeover target rebuffed the approach, made at a modest 4pc premium to Touchstone’s market value, although it admitted that "the proposal has certain merits". Touchstone said it was unable to agree on terms and governance prior to IP Group embarking on a £200m capital raise, which it announced separately today.

[davr0s] 23/5/2017 07:25

Crikey they have been busy. Glad the fund raising is very close to share price. Hopefully it will put some momentum behind this as its not gone very far in last few years. I bought last week so remains to be seen if that was good or bad timing!

[backwoodsman] 10/5/2017 17:01

Modern Water has seen a recovery as of late

[broadwood] 10/5/2017 15:57

(ShareCast News) - Intellectual property-based business developer IP Group issued a statement on Wednesday morning, updating the market on its position and progress since 31 December, as investors headed for the company's London offices for the annual general meeting in the afternoon.
The FTSE 250 firm said that, as at 30 April, the fair value of the group's portfolio was £652.1m compared to £614.0m at 31 December.

It said that reflected a net fair value increase of £29.3m and portfolio investments of £8.8m during the period.

"The fair value increase in the period of £29.3m was due to a net increase in the fair value of the group's holdings in AIM-listed portfolio companies, which increased by £16.1m in the period, and a net increase in the value of the group's private portfolio companies," the board said in its statement.

"From the quoted portfolio, the most significant increases arose from Xeros (+£7.4m), Diurnal (+£4.7m), Actual Experience (+£4.0m) and Ceres Power (+£3.6m) offset to a degree by hVivo (-£5.7m) and Tissue Regenix (-£5.2m).

"The most notable fair value change in the private portfolio arose from Ultrahaptics Holdings Limited, whose recently announced fundraising resulted in a direct unrealised fair value gain to IP Group of £8.8m and a fair value gain of £3.2m to IP Venture Fund II, the latter of which is included within the Group's consolidated results."

The group's portfolio now comprised holdings in 50 intellectual property-based companies categorised within the 'focus' or 'development' stage, a further 41 early stage companies and three multi-sector platform holdings.

Over the period, the group deployed capital totalling £8.8m to 14 portfolio companies and opportunities.

The board said significant developments in the group's portfolio companies since 31 December included Ultrahaptics recently announcing that it had completed a fundraising of £17.9m to support its global expansion and entry into virtual and augmented reality markets.

"The funding was supported by both existing shareholders, including IP Group and Woodford Investment Management, and new investors, Cornes Technology Investments Limited and Dolby Family Ventures."

Actual Experience announced it had raised a total of £17.5m - before expenses - by means of a conditional placing in March.

"The proceeds of the placing will enable Actual Experience to put in place the resources to support its channel partners as they commence the deployment of its technology into their global enterprise customer base," the board said.

Xeros Technology Group announced the launch of Symphony Project, providing manufacturers of conventional commercial washing machines with 'open source' access to Xeros' "innovative" polymer technology.

"Xeros has developed a simple retrofit pedestal that integrates Xeros' cleaning system into conventional machinery whilst causing minimal disruption to the manufacturing process.

"This provides a gateway for the incorporation of Xeros' technology into any commercial washing machine."

Avacta Group announced that an evaluation of its Affimer technology by a large, global diagnostics developer had successfully concluded and that the third party had taken exclusive rights to several Affimer reagents for an undisclosed sum.

"This is the first such evaluation to conclude and it has led to an agreement to provide exclusivity for certain Affimers which are relevant in a large diagnostic market," IP Group's board explained.

"This is an important commercial step and a validation of the significant potential of the licensing business model."

In the US, the firm's first two portfolio companies from US university partners, Exyn Technologies and Uniformity Labs, raised a combined £5.4m in new post seed financing rounds via the private placement of ordinary shares.

Looking at the books, the group had cash of £93m as at 30 April, alongside a diversified portfolio valued at £652m and net assets of £797m.

The group's 'hard' net assets - that is, excluding goodwill and intangibles - were £720m or approximately 127p per share.

[bamboo2] 02/3/2017 21:31

Touche!

Good trading.

[bigdazzler] 02/3/2017 21:27

Oh well at least I die rich from shorting instead lol

Funny enough I had a secondary target of 140 but elected to fully close out in my primary target of around 150.

I would not be surprised one bit to see the 140 you mention

[bamboo2] 02/3/2017 21:11

The H&S shoulder patterns both target historical support at 140.



Mr bd, unfortunately, the company that was working on the treatment that would have saved your life was unable to complete its research, due to it being shorted out of business.
There's nothing we can do...

[bigdazzler] 02/3/2017 16:42

Well closed my short today nice profit again. 15% return on the trade.