LONDON (ShareCast) - (ShareCast News) - Touchstone Innovations on Tuesday confirmed IP Group's merger approach, adding that it had advised shareholders to take no action.
In a statement, Touchstone said it had engaged with its potential suitor as the proposal had "certain merits" and its large shareholders asked the board to look at the deal.

Intellectual property-based business developer IP claimed earlier on Tuesday that its proposal had the support of 51.8% of its target's shareholders although Touchstone's board had rejected its approach of 2.1490 IP shares for every Touchstone share.

This would give Touchstone shareholders a 38% per cent stake in the merged group and implied an offer value of 307 pence per Touchstone share.

In a separate announcement, IP said it was raising £200m through a new shares issue at a price of 140p each to help fund the launch of IP Group Australia, a wholly-owned private company incorporated in the state of Victoria.

"An agreement on terms and governance could not be agreed prior to the capital raise announced today by IP Group," Touchstone said.

"Any recommended proposal would need to reflect the best interests of Touchstone and its shareholders as a whole, and having regard to its management, the interests of employees and the position of portfolio companies."

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