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The materialisation of a mega-firm in the world of intellectual property is one step closer this morning as Xenith IP Group (ASX: XIP) supports a takeover from Australia's largest firm.
The board of Xenith has confirmed that it unanimously backs the updated IPH (AX: IPH) offer of an implied value of $2.15 per Xenith share.
Under the offer Xenith shareholders will receive $1.28 cash and 0.1261 IPH shares for every Xenith share.
Xenith shareholders may alternatively elect to receive up to 100 per cent scrip consideration or up to 100 per cent cash consideration per Xenith share.
The updated proposal values the equity in Xenith at around $191 million, with an implied enterprise value of approximately $207 million.
Shareholders will be given the opportunity to vote on IPH's takeover offer at some point in July 2019 the date is yet to be confirmed by Xenith.
Xenith's support of the IPH takeover comes one day after QANTM bowed out of a bidding war to merge with Xenith.
QANTM decided it could not match IPH's takeover offer, with a source close to QANTM confirming that the IP firm did not see value for money in an increased offer.
Chair of Xenith Sibylle Krieger says that the updated offer from IPH is the best value for shareholders of all the deals on the table.
"Following constructive discussions between Xenith and IPH, Xenith's board is pleased with the value and flexibility the updated IPH proposal provides to all Xenith shareholders," says Krieger.
"In addition, it appears that the brand within the IPH group each have their own distinct culture, and that the IPH group can accommodate the range of cultures which exists among the portfolio of businesses of Xenith."
A merged Xenith-IPH would bring together a number of leading Australian intellectual property firms. Xenith is the parent company behind Griffith Hack, Shelston Intellectual Property, Watermark and Glasshouse Advisory. IPH is the umbrella company for Spruson & Ferguson, Pizzeys, and AJ Park.
"In the view of the Xenith board, the combination of IPH and Xenith presents significant opportunities for shareholders, clients, employees and Xenith as a group," says Krieger.
A merged Xenith and IPH has already been granted approval by the ACCC despite the merged group anticipated to have control of around 30 per cent of the Australian intellectual property sector.
IPH managing director and CEO Andrew Blattman has welcomed Xenith's change of heart.
"We are very pleased to enter into a scheme implementation deed with Xenith, which we believe provides significant opportunity to bring together two high quality IP businesses and to draw on the strengths, skills and advantages of each member firm to realise opportunities for the people, clients and shareholders of both businesses," says Blattman.
Shares in Xenith are up 0.24 per cent to $2.10 per share at 10.32am AEST and shares in IPH are up 1.01 per cent to $7.02 per share at 10.37am AEST.
Read more:
- QANTM backs down on Xenith merger
- IPH lifts takeover bid: Is Xenith shifting allegiances?
- Xenith merger vote delayed after ACCC decision
- ACCC gives IPH acquisition of Xenith the green light
- The tug of war for Xenith IP Group heats up
- Xenith rebuffs IPH takeover bid
- IPH threatens QANTM-Xenith merger with counterbid
- QANTM-Xenith merger to create $285m IP powerhouse
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