The Motley Fool

Xenith IP share price surges 15% higher after IPH outbids QANTM IP

The IPH Ltd (ASX: IPH) share price and the Xenith IP Group Ltd (ASX: XIP) share price have been strong performers on Tuesday.

At the time of writing the IPH share price is 2.5% higher to $6.69 and the Xenith IP share price has stormed 15% higher to $1.85.

One share that hasn’t followed suit is the QANTM Intellectual Property Ltd (ASX: QIP) share price which is down 3.5% to $1.60 this morning.

What happened?

This morning IPH announced that it has submitted a proposal to acquire Xenith IP for a combination of cash and shares. Under the proposal Xenith IP shareholders will receive $1.28 cash and 0.1056 IPH shares for every Xenith share, representing a total value of $1.97 per Xenith share.

This has cast doubts over the proposed Xenith IP-QANTM IP merger and appears to have put IPH in pole position.

According to the release, IPH believes its proposal provides compelling benefits for Xenith’s shareholders, its leading IP attorneys, and other stakeholders. It also notes that it is 23.3% greater than the implied QANTM merger consideration.

The company has reiterated that it intends to vote against the merger of Xenith and QANTM at the upcoming scheme meeting, should it still go ahead.

Managing director and CEO, Dr Andrew Blattman, believes the combination of the two companies would be a big positive for both sets of shareholders.

He said: “We believe our proposal to Xenith provides a great 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 our people, our clients and our shareholders.”

What now?

I think the combination of IPH and Xenith IP would create a force in the intellectual property services industry.

This could make it worth considering an investment in IPH if the acquisition goes ahead. Though, I’d suggest investors keep their powder dry until Xenith IP and QANTM IP have responded to this development.

JUST RELEASED: Our Top 3 Dividend Picks for March

NEW! The Motley Fool’s team of crack analysts has just released a timely report revealing the names and codes of their top 3 dividend share recommendations for 2019. Be among the first investors to get access—FREE, for a strictly limited time. You’ll discover the names of 3 hefty dividend paying companies with what our analysts consider to be solid growth prospects for the year ahead…

The first two currently offer fat, fully franked yields and the third is a surprising REIT offering you the chance to become a landlord with none of the hassle! If you’re looking for hot new ideas, look no further. But you do need to hurry. Snap up your free copy now, before supplies run out!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our top 3 dividend share recommendations right away.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended IPH Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!