Xenith rebuffs IPH takeover bid

Xenith rebuffs IPH takeover bid

The board of intellectual property company Xenith (ASX: XIP) is not impressed by a 9 per cent lift in IPH's (ASX: IPH) takeover offer, and will press on with another merger in the works. 

In an announcement today the group concluded IPH had not presented a superior offer to the merger deal underway with QANTM Intellectual Property (ASX: QIP), noting the transactions would be "fundamentally different".

Xenith noted the terms of value of IPH's offer were framed to be equivalent to the XIP/QIP merger, yet lacked the control premium normally associated with outright control.

"The XIP/QIP merger results in shared future control with Xenith shareholders holding 45% of the merged entity and standing to benefit from 45% of the earnings accretion expected to result from the merger," the board said.

"In addition, Xenith shareholders will have half the board representation of the merged entity.

"By contrast, the IPH proposal is an outright control transaction in which Xenith shareholders would own less than 5% of the merged entity."

Xenith also pointed to a "materially higher execution risk" in the IPH proposal in terms of clearance from the Australian Competition and Consumer Commission (ACCC).

"IPH already has a significantly higher market share than either of Xenith or QANTM. If the IPH proposal were implemented, the merged group would be by far the largest player in the market," the board said.

"By contrast, the XIP/QIP merger would result in a market more evenly balanced between two listed players of roughly equivalent size and differentiated in terms of service offering."

The sought-after firm also mentioned the significant cash component of the IPH proposal was unlikely to attract the capital gains tax rollover relief that would generally be available in a pure scrip for scrip transaction such as the XIP/QIP merger.

In a statement, the board of QANTM has reiterated its support for the XIP/QIP merger, citing compelling financial, strategic, cultural and operational benefits. 

More here

IPH threatens QANTM-Xenith merger with counterbid
QANTM-Xenith merger to create $285m IP powerhouse

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

From pandemic side hustle to multi-million dollar business: Meet Ling Fung
Partner Content
Ask any parent, and they’ll tell you: preparing for a new baby is no easy task.&n...
Metro Baby
Advertisement

Related Stories

Sydney's Top Companies revealed

Sydney's Top Companies revealed

Rising interest rates, the ascent of large carbon emitters, sustain...

Sydney Top Companies 1-10

Sydney Top Companies 1-10

With Commonwealth Bank (ASX: CBA) and Westpac (ASX: WBC) alone acco...

Sydney Top Companies 11-20

Sydney Top Companies 11-20

Health, energy, alcohol and air travel were four of the sector...

Sydney Top Companies 21-30

Sydney Top Companies 21-30

As much as the public discourse has tilted against coal as investor...