IP Group Shares Rally as Railpen Takeover Deadline Looms

Shares in IP Group PLC (LSE:IPO) climbed on Monday as investors focused on a key M&A deadline that requires its largest shareholder, the pension fund Railpen, to either announce a firm intention to make an offer or withdraw.

The stock rose 3.6% to 66.9p in morning trade, pushed higher by the event-driven momentum created by the UK Takeover Code's "put-up-or-shut-up" deadline, which expires at 5 p.m. London time.

Railpen's Sweetened Proposal

The deadline pressure follows a revised and more complex offer from Railpen unveiled on July 17. The new proposal includes several components designed to win over the board and shareholders:

• A cash offer of 61p per share, up from a previous 59p.
• A distribution of IP Group’s entire holding in Oxford Nanopore Technologies, valued at approximately 10.6p per IP Group share.
• A contingent value right (CVR) of up to 11.3p per share, linked to the future performance of IP Group’s investment in biotech firm Metsera through the end of 2029.

Excluding the performance-based CVR, the offer implies a total value of approximately 71.6p per share. This represents a premium of roughly 10.8% to the company's prior closing price of 64.6p.

Valuation Dispute

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IP Group's board has consistently resisted Railpen's advances, rejecting at least four prior approaches from its top shareholder, which holds an 18.4% stake. The board has argued that each proposal materially undervalues the company and its portfolio of science and technology investments.

The central point of contention is the gap between the offer price and the company's self-assessed worth. According to its latest filings, IP Group's reported Net Asset Value (NAV) was 110.4p per share as of December 31, 2025, significantly higher than Railpen's implied bid.

Market Context

The situation unfolds against a supportive backdrop for UK equities, with the FTSE 250 index, of which IP Group is a member, trading in positive territory. A broader recovery in UK M&A activity and capital markets sentiment in 2026 has also lifted investor appetite for listed investment companies.

Investors are now watching to see if Railpen will formalize its offer before the deadline. A firm bid could provide further upside for the stock, while a decision to walk away could see the recent gains reverse.