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IPH share price climbs 1% higher as it closes in on Xenith merger

The IPH Limited (ASX: IPH) share price has climbed 1% higher this morning as it announced it has entered into a Scheme Implementation Deed with Xenith IP Group Ltd (ASX: XIP).

What did Xenith and IPH announce this morning?

Xenith and IPH have entered into a Scheme Implementation Deed whereby IPH will acquire the shares of Xenith that it doesn’t already own for a combination of cash and shares valued at $2.15 per Xenith share.

The Xenith Board unanimously supported the updated IPH proposal which will be implemented through a Scheme of Arrangement, with ‘Standard Consideration’ of $1.28 cash and 0.1261 IPH shares for every Xenith share, representing a total value of $2.15 per Xenith share.

The updated IPH proposal values the equity of Xenith at approximately $191 million, with an implied enterprise value of approximately $207 million.

Xenith shares have moved 0.2% higher this morning to $2.11 per share, just shy of the implied $2.15 acquisition value with all signs pointing towards a smooth completion of the deal.

Under a “mix and match” facility, Xenith shareholder may alternatively elect to receive “Maximum Scrip Consideration” (up to 100% scrip consideration) or “Maximum Cash Consideration” (up to 100% cash consideration) per Xenith share, subject to scale-back.

How did QANTM respond?

QANTM Intellectual Property Ltd (ASX: QIP) earlier confirmed it will not make a counter-proposal to match the terms of IPH’s updated proposal.

This comes after months of back-and-forth between QANTM and IPH as they have tussled for the better deal with Xenith, with both transactions recently being approved by the ACCC.

QANTM was for months the preferred offer of the Xenith Board as it did not deem IPH’s proposal to be superior, but that all changed on Monday when IPH bumped its offer up to the equivalent of $2.15 per Xenith share.

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Motley Fool contributor Lachlan Hall 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.

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