Imperial Innovations Group Regulatory News (IVO)

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES OR IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION.

THE FOLLOWING ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT MAKE ANY INVESTMENT DECISION IN RELATION TO THE NEW IP GROUP SHARES EXCEPT ON THE BASIS OF THE INFORMATION IN THE OFFER DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE COURSE.

THIS ANNOUNCEMENT CONSTITUTES INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO.596/2014.

FOR IMMEDIATE RELEASE

18 July 2017

Improved Offer for Touchstone Innovations plc by IP Group plc

Support for Improved Offer from Imperial College of Science, Technology and Medicine ("Imperial College")

1. Introduction

On 20 June 2017, IP Group plc ("IP Group") published an announcement (the "Firm Offer Announcement") setting out the terms of an offer to be made by IP Group for the whole of the issued and to be issued share capital of Touchstone Innovations plc ("Touchstone"), to be effected by means of a takeover offer under the City Code on Takeovers and Mergers and within the meaning of Part 28 of the Companies Act (the "Original Offer"). Terms defined in the Firm Offer Announcement have the same meaning in this Announcement, unless the context requires otherwise. Except as otherwise stated in this Announcement, all of the terms and conditions of the Original Offer, set out in the Firm Offer Announcement, remain as announced on 20 June 2017.

2. Improved Offer

IP Group is pleased to announce the terms of its improved offer (the "Improved Offer") for Touchstone. Under the terms of the Improved Offer, each Touchstone Shareholder will be entitled to receive 2.2178 New IP Group Shares for each Touchstone Share (the "New Exchange Ratio").

Based on the Closing Price of 137 pence per IP Group Share on 17 July 2017 (being the last Business Day prior to the date of this Announcement), the New Exchange Ratio values each Touchstone Share at 304 pence.

The New Exchange Ratio will be adjusted:

· following the issue of 16,500,000 IPG Shares which, subject to the satisfaction of certain conditions, are to be issued to Galaxy pursuant to the Galaxy subscription letter. In this case the New Exchange Ratio would increase to 2.2187.

As noted in IPG's announcement on 8 June 2017 the issue of these IPG Shares to Galaxy is subject to receipt of foreign exchange and other regulatory approvals in order to allow for settlement and admission no later than 8:00 a.m. on 18 August 2017. This subscription is subject to approvals outside the control of IPG and Galaxy and there is therefore no certainty of these IPG Shares being issued. In the event that the outcome of these regulatory reviews is not known prior to the sooner to occur of Completion or Day 45, the Exchange Ratio will increase to 2.2187 subject to further adjustment below. If the relevant permissions for the Galaxy investment have been declined by Day 45 (and the Offer has not become or been declared unconditional as to acceptances) then no adjustment will be made; and

· if, as a result of an increase in the price of the IPG Shares, the implied offer value per Touchstone Share were to become worth more than 330 pence. In such event, the number of New Shares to be issued per Touchstone Share will be reduced such that the implied offer value per Touchstone Share remained at 330 pence (the "New Offer Cap"). Any adjustment to the Exchange Ratio will be finally determined at Completion and the implied offer value per Touchstone Share will be calculated by reference to the average of the daily volume weighted average prices of an IPG Share over the 30 Business Days prior to the Completion Date and will be rounded to four decimal places. The New Offer Cap is not a no increase statement and should not be taken to mean that the New Exchange Ratio or New Offer Cap cannot be increased.

Assuming acceptance of the Improved Offer in full, Touchstone Shareholders would own approximately 34 per cent. and IP Group Shareholders would own approximately 66 per cent. of the Combined Group.

3. Irrevocables and letters of support

IP Group has received a non-binding letter of intent from Imperial College in favour of the Improved Offer representing approximately 15.3 per cent of Touchstone's issued share capital. Following this, IP Group has now received support for the Improved Offer from holders of Touchstone Shares representing, in aggregate, 89.7 per cent of Touchstone's issued share capital.

Further details of the irrevocable undertakings and letters of intent are set out at Appendix 1 in this Announcement.

4. Background to and rationale for the Improved Offer

Following the Firm Offer Announcement, IP Group sought to resume engagement with Touchstone regarding their concerns around value and people, with the hope of achieving a recommendation. However, a recommended position with the Touchstone Board was not reached.

IP Group put the Improved Offer directly to Imperial College and Imperial College has provided a letter of intent in favour of the Improved Offer which provides further certainty for the transaction.

We are committed to the proposals made in our Firm Offer Announcement regarding people and strategy, and hope to welcome the Touchstone team to the Combined Group.

Alan Aubrey, CEO of IP Group, said: "We welcome Imperial College's support and remain confident that the enlarged Group will be well placed to build significant shareholder value as we create an international leader in IP commercialisation."

The Endowment Board of Imperial College London, said: "Since its formation, Touchstone has supported scientists and entrepreneurs in the commercialisation of their ideas. As the founding shareholder of Touchstone, we value the efforts of the team in creating a diverse portfolio of businesses based on university intellectual property. We also recognise that this could not have been achieved without our largest co-shareholders, Invesco, Woodford and Lansdowne, and we thank them for their longstanding support.

We value the Touchstone employees and management and welcome the proposals IP Group has made in that regard. We are supportive of the strategic rationale of this transaction and appreciate the increased value for Touchstone's shareholders implied by the New Exchange Ratio. As a result of these factors, we would be willing to accept the Improved Offer."

Appendix 2 contains the sources and bases of certain information used in this Announcement.

Enquiries

Further Information

This Announcement is for information purposes only and is not intended to and does not constitute or form part of an offer, invitation or the solicitation of an offer or invitation to purchase, or otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise nor shall there be any sale, issuance or transfer of securities of IP Group or Touchstone pursuant to the Offer in any jurisdiction in contravention of applicable laws. The Offer will be implemented solely pursuant to the terms of the terms of the Offer Document (or, in the event that the Offer is to be implemented by means of a Scheme, the Scheme Document), which will contain the full terms and conditions of the Offer. Any decision in respect of, or other response to, the Offer should be made on the basis of the information contained in the Offer Document.

IP Group will prepare the Circular to be distributed to IP Group Shareholders and will also publish the Offer Document containing information on the New IP Group Shares and the Combined Group. IP Group urges Touchstone Shareholders to read the Offer Document carefully when it becomes available because it will contain important information in relation to the Offer, the New IP Group Shares and the Combined Group.

IP Group urges IP Group Shareholders to read the Circular carefully when it becomes available. Any vote in respect of resolutions to be proposed at the IP Group General Meeting to approve the Offer, or related matters, should be made only on the basis of the information contained in the Circular.

This Announcement does not constitute a prospectus or prospectus equivalent document.

Information Relating to Touchstone Shareholders

Please be aware that addresses, electronic addresses and certain other information provided by Touchstone Shareholders, persons with information rights and other relevant persons for the receipt of communications from Touchstone may be provided to IP Group during the Offer Period as required under Section 4 of Appendix 4 of the City Code.

Overseas Jurisdictions

The release, publication or distribution of this Announcement in or into jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe any applicable legal or regulatory requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Unless otherwise determined by IP Group or required by the City Code, and permitted by applicable law and regulation, the availability of New IP Group Shares to be issued pursuant to the Offer to Touchstone Shareholders will not be made available, directly or indirectly, in, into or from the United States or any other Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Offer by any means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction.

Accordingly, copies of this Announcement and any formal documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction or any other jurisdiction where to do so would constitute a violation of the laws of that jurisdiction, and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send such documents in or into or from any Restricted Jurisdiction.

The Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, email or other electronic transmission or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of New IP Group Shares pursuant to the Offer to Touchstone Shareholders who are not resident in the United Kingdom or the ability of those persons to hold such shares may be affected by the laws or regulatory requirements of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements. Touchstone Shareholders who are in doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This announcement is not for publication, distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

Important Notices Relating to Financial Advisers

N.M. Rothschild & Sons Limited ("Rothschild"), which is authorised and regulated by the FCA in the UK, is acting exclusively for IP Group and no one else in connection with the Offer and will not be responsible to anyone other than IP Group for providing the protections afforded to clients of Rothschild or for providing advice in relation to the Offer or any other matters referred to in this Announcement.

Numis Securities Limited, which is authorised and regulated by the FCA, is acting exclusively for IP Group and no one else in connection with the Offer and Numis Securities Limited will not be responsible to anyone other than IP Group for providing the protections afforded to its clients or for providing advice in relation to the Offer or any other matters referred to in this Announcement.

Cautionary Note Regarding Forward-Looking Statements

This Announcement (including any information incorporated by reference into this Announcement), oral statements regarding the Offer and other information published by IP Group and/or Touchstone contain certain forward-looking statements with respect to the financial condition, strategies, objectives, results of operations and businesses of IP Group and/or Touchstone and their respective groups and certain plans and objectives with respect to the Combined Group. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of IP Group and/or Touchstone about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The forward-looking statements contained in this Announcement include statements relating to the expected effects of the Offer on IP Group and/or Touchstone, the expected timing and scope of the Offer and other statements other than historical facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "hope", "aims", "continue", "will", "may", "should", "would", "could", or other words of similar meaning. These statements are based on assumptions and assessments made by IP Group, and/or Touchstone in light of their experience and their perception of historical trends, current conditions, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors described in the context of such forward-looking statements in this Announcement could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and readers are therefore cautioned not to place undue reliance on these forward-looking statements.

There are several factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions. For a discussion of important factors which could cause actual results to differ from forward-looking statements in relation to the IP Group Companies or the Touchstone Group, please refer to the annual report and accounts of IP Group for the financial year ended 31 December 2016, the interim accounts of IP Group for the six months ended 30 June 2017 and the annual report and accounts of the Touchstone Group for the financial year ended 31 July 2016 and the interim accounts of the Touchstone Group for the six months ended 31 January 2017, respectively.

Each forward-looking statement speaks only as at the date of this Announcement. Neither IP Group nor any IP Group Company assumes any obligation to update or correct the information contained in this Announcement (whether as a result of new information, future events or otherwise), except as required by applicable law.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

No Profit Forecasts or Estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share or dividend per share for IP Group, Touchstone or the Combined Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share or dividend per shared for IP Group, Touchstone or the Combined Group as appropriate.

Dealing and Opening Position Disclosure Requirements

Under Rule 8.3(a) of the City Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified.

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th Business Day following the commencement of the Offer Period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on Website and Availability of Hard Copies

A copy of this Announcement and the documents required to be published pursuant to Rule 26 of the City Code is and will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, for inspection on the investor relations section of IP Group's website www.ipgroupplc.com/investorrelations/ by no later than 12 noon (London time) on the Business Day following this Announcement. For the avoidance of doubt, the contents of the websites referred to in this Announcement are not incorporated into and do not form part of this Announcement.

You may request a hard copy of this Announcement free of charge (subject to certain restrictions relating to persons resident in Restricted Jurisdictions) by writing to Freddie Barnfield at Numis at f.barnfield@numis.com or by calling +44 (0)20 7260 1000 during normal business hours. It is important that you note that unless you make such a request, a hard copy of this Announcement will not be sent to you. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.

APPENDIX 1DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

APPENDIX 2SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement:

1. The value of the Improved Offer is calculated:

a. by reference to the price of 137 pence per IP Group Share, being the Closing Price on 17 July 2017, the last Business Day prior to this Announcement; and

b. by reference to the New Exchange Ratio of 2.2178 New IP Group Shares in exchange for each Touchstone Share.

2. Unless otherwise stated, references to the existing issued share capital of IP Group are to the number of IP Group Shares in issue as at 17 July 2017, being the last Business Day prior to the date of this Announcement, which was 696,727,321 IP Group Shares. The international securities identification number for the IP Group Shares is GB00B128J450.

3. References to the existing issued share capital of Touchstone are to the number of Touchstone Shares in issue as at 31 January 2017 and taken from Touchstone's results for the six months ended 31 January 2017, published on 31 March 2017, which was 161,204,124 Touchstone Shares. The international securities identification number for the Touchstone Shares is GB00B170L953.