23rd Jan 2014 09:21
LONDON (Alliance News) - IP Group PLC and Fusion IP PLC Thursday unveiled a takeover deal that will see IP Group buy up the rest of the AIM-quoted company's shares, adding to its existing 20.1% stake.
IP Group also said it will seek to raise GBP75.0 million in a share issue designed to fund its future growth.
Fusion IP shares shot up by 21% to 76.10 pence Thursday morning, while IP Group shares were down 1.9% at 176.50 pence.
The deal for Fusion IP values the company at GBP87.8 million.
Under the terms of the agreement, Fusion IP shareholders will be entitled to 0.446 of a new IP Group share for every Fusion IP share they already own.
That values each Fusion IP share about 80.2 pence, a premium of 27% to Fusion IP's closing price of 63.0 pence on Wednesday.
Both companies focus on building businesses based on commercialising the research of university partners, with IP Group citing Fusion IP's spin-out companies from its four partner universities - the University of Sheffield, the University of Nottingham, Cardiff University and Swansea University - as a motivating factor in the deal.
In a separate statement, IP Group said it will issue about 45.5 million shares, priced at 165 pence each, in a GBP75.0 million capital raising, but said the acquisition of Fusion IP does not depend on it. Two-thirds of the issuance - 30.3 million shares raising GBP50.0 million - is via a firm placing underwritten by Numis Securities, while GBP25 million will be via an open offer of 15.2 million shares. Existing shareholders can subscribe to 4.0377 offer shares for each 100 IP Group shares they already hold.
The company said it is able to increase the capital raising by up to a third - which would take the gross proceeds to about GBP100 million - if investors show enough demand.
IP Group said the share issue will give it the capital it needs to fund group level growth, the growth of its US business and to develop "novel" therapeutics through its spin-out companies.
By Samuel Agini; [email protected]; @samuelagini
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