QANTM Declines To Make A Counter-Proposal To Acquire Xenith Before The Deadline

QANTM Declines To Make A Counter-Proposal To Acquire Xenith Before The Deadline

QANTM Intellectual Property Limited (ASX: QIP) owns a number of intellectual property (IP) businesses in many countries across the world like Singapore, Australia, New Zealand, etc. The company has 150 highly qualified professionals working under the three brands namely; Davies Collison Cave, FPA Patent Attorneys, and Advanz Fidelis IP Sdn Bhd. With over 270 years of combined history, the company has a good track record in providing IP services to both local and international clients. It has some of the prestigious clients like Fortune 500 companies, start-up technology businesses public research institutions and universities, etc.

On 11th April 2019, the company announced that it has been made aware of an announcement on 8th April 2019 by Xenith IP Group Ltd and IPH Ltd with respect to IPH’s revised proposal to acquire 100% stake of Xenith through a scheme of arrangement. The company stated that it had been reached by Xenith to provide a counter-proposal to match the terms of IPH’s revised proposal till the deadline of 5:00 PM on Thursday 11th April 2019. In reply to this, the company has notified Xenith that it will not be making any revised proposal prior to that deadline.

 On 8th April 2019, Xenith had confirmed that after further discussions with IPH, it had received a revised proposal from IPH under which IPH would acquire 100% of Xenith via a scheme of arrangement. This updated proposal by IPH was comprised of a competing proposal as defined in the scheme implementation deed between Xenith and QANTM, dated 26th November 2018. On the basis of this deed, Xenith had given QANTM 3 business days (up to 5:00 PM on Thursday 11th April 2019) to place a revised proposal to match the terms of the Updated IPH’s Proposal.

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The revised proposal by IPH proposed the purchase for a mix of cash and IPH shares valued at $2.15 per Xenith share. Under this new proposal, the shareholders of Xenith will receive ‘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 based on IPH’s closing price on 5th April 2019 of $6.90 per share. This valued the remaining shares of Xenith at approximately $154 million.

However, the proposal has not been signed by any of the parties yet because under the proposed scheme implementation deed QANTM must be notified about the revised bid and must be given three business days to revise its proposal and match its right. After the expiration of this period, IPH and Xenith will be in a position to agree and sign the proposal.

On 22nd February 2019, QANTM released its 1HFY19 results wherein it reported a decent 12% growth in the total revenue

QANTM company has a market cap of A$174.3 million. On the technical front, the stock price increased by 0.76% on ASX and closed at the highest price of the day, A$1.32 as of 11th April 2019. In the last six months, the stock has remained subdued and increased by only 0.7% while the YTD return stands at negative 6%.


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