IP Group Rejects £630 Million Takeover Bid From Top Shareholder Railpen

The board of IP Group PLC has rejected a revised takeover proposal from its largest shareholder, Railpen, stating that the offer undervalues the science-focused investment firm. The bid valued IP Group at approximately £630 million ($845.27 million), according to a statement released Monday.

Offer Details

Railpen, which already holds an 18.4% stake in IP Group, structured its proposal with several components. The offer, which could have reached a total value of around £730 million, included:

• 61 pence per share in cash.
• A proportional distribution of IP Group's entire holding in Oxford Nanopore Technologies, valued at 10.3 pence per share.
• A contingent value right (CVR) of up to 11.3 pence per share, linked to performance targets for IP Group's investment in biotech company Metsera, to be met by the end of 2029.

Excluding the performance-based CVR, the offer of 71.3 pence per share represented a premium of approximately 10.2% to IP Group's closing share price of 64.7 pence on Monday.

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Next Steps and Market Context

IP Group's board concluded that the proposal did not adequately reflect the value of its portfolio or its future potential. The rejection puts the focus back on Railpen, which manages over £34 billion in assets for UK railway pension schemes.

Following the development, the UK Takeover Panel has extended the deadline for Railpen to make a decision. The pension fund now has until July 27 to either announce a firm intention to make an offer or confirm that it will not pursue a takeover of IP Group. Railpen has not yet commented publicly on the rejection.