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Melbourne-based QANTM Intellectual Property (ASX: QIP) has brushed off takeover offers from one Sydney suitor in favour of a merger with another, Xenith IP Group (ASX: XIP), in an all-scrip deal that would see it own a majority stake in the combined IP services entity.
Shares in QANTM and Xenith have risen 6.9 per cent and 9.6 per cent respectively following the news.
The deal will still be subject to approval by Xenith shareholders who would end up owning 45 per cent of the marged company, and implies a pro rata market capitalisation of $285.2 million.
The merger is expected to create a "market leading" group of independent intellectual property services businesses in Australia, New Zealand and Asia.
"The merger of QANTM and Xenith brings together two outstanding Groups, creating a single leading IP services group in Australia and Asia," says QANTM chair Richard England.
"It is clear that the businesses within the QANTM and Xenith Groups have great respect for each other, and while each of those businesses will continue to operate independently in supporting their clients, the increased scale will enable the Merged Group to achieve its strategic objectives more quickly and more effectively.
"With a high degree of strategic alignment already, and the synergies identified, we believe the transaction will generate significant value for shareholders."
Xenith chair Sibylle Krieger says the groups' portfolio businesses come from similar histories, with a "strong alignment" on values, vision and strategy for the future.
"The proposed merger of equals represents a unique opportunity for Xenith as a group to partner with a like-minded Group, and for its shareholders to benefit from significant value and future earnings accretion through the Transaction," she says.
QANTM's announcement was accompanied by a rejection of IPH Limited's (ASX: IPH) takeover offer of $1.80 per QANTM share, which represents a 28 per cent premium on the current share price.
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