QANTM backs down on Xenith merger

Written on the 11 April 2019 by David Simmons

QANTM backs down on Xenith merger

The battle for control of intellectual property business Xenith IP Group (ASX: XIP) has more or less come to a close now that QANTM (ASX: QIP) has backed out of the ring.

After QANTM's rival in the courtship of Xenith, IPH (ASX: IPH), increased its takeover bid Xenith gave QANTM until Thursday 11 April to match the bid.

But today, the end of the deadline, QANTM has announced that it will not make a counter-proposal to match the terms of IPH's updated proposal, effectively spelling the end of the bidding war.

A QANTM source close to the deal said that the option to meet IPH's updated proposal was rejected at a board meeting last night. 

The source said that the board did not consider Xenith value for money at $2.15 per share. 

Xenith, the IP firm caught in the midst of this, appeared to be siding with QANTM for the majority of the bidding war, but gave in to IPH's new offer of $2.15 per share on Tuesday.

IPH managing director Dr Andrew Blattman said on Tuesday that its increased offer was the result of "constructive discussions" between Xenith and IPH.

"We believe our Revised IPH 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," says IPH managing director Dr Andrew Blattman.

Under the revised bid, Xenith shareholders would receive a standard consideration of $1.28 in cash and 0.1261 IPH shares for every Xenith share, or they will be able to choose a maximum scrip consideration of up to 100 per cent.

With QANTM more or less out of the picture the likelihood of a Xenith-IPH mega-intellectual property firm materialising is greater.

The ACCC has already given IPH the greenlight to merge with Xenith, putting together the two largest suppliers of intellectual property services in Australia.

Once combined the mega-firm would have around 30 per cent of the market share of IP services in Australia.

Shares in Xenith are down 0.24 per cent to $2.10 per share at 12.32pm AEST. Meanwhile, shares in IPH are up 0.36 per cent and QANTM shares are also up 0.76 per cent.

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Author: David Simmons

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