Touchstone Innovations : Update on possible offer

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.

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.

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

IP Group plc ('IP Group' or the 'Company') - possible offer for Touchstone Innovations plc ('Touchstone') - update on exchange ratio for Capital Raise

As noted in the possible offer announcement released by IP Group on 23 May 2017 (the 'Possible Offer Announcement'), the Exchange Ratio of 2.1490 IP Group shares for each Touchstone share was subject to adjustment to take into account the Capital Raise and the 2.1 per cent. discount offered on IP Group shares as part of the Capital Raise.

IP Group announced this morning the completion of the Capital Raise, raising total gross proceeds of £207m with £23m being subject to delayed settlement by Beijing Galaxy World Group. Consequently, to account for the £184m of the firm capital raised to date, IP Group is announcing the following adjustments to the Possible Offer:

a) the Exchange Ratio increases to 2.1575;

b) Touchstone shareholders would own approximately 33 per cent of the enlarged share capital of IP Group; and

c) on the basis of the closing IP Group share price on 22 May 2017, the implied offer value remains 307 pence per Touchstone share.

A further update to the exchange ratio will be announced once the subscription by Beijing Galaxy World Group has settled.

Words and terms used in this announcement shall have the same meaning as given to them in the Possible Offer Announcement, where the context so permits.

Notes

As set out in the Possible Offer Announcement, the Exchange Ratio will also be adjusted if, as a result of an increase in the IP Group share price, the implied offer value per Touchstone share were to become worth more than 320 pence (the Offer Cap). In such event, the number of IP Group shares to be issued per Touchstone share will be reduced such that the implied offer value per Touchstone share remains at 320 pence. The IP Group share price used for this adjustment will be calculated by reference to the volume weighted average price of an IP Group share over a set period.

The mechanics for the amendment of the Exchange Ratio under the Offer Cap (including the date when it will be made) will be described fully in any announcement of a firm offer for Touchstone made under Rule 2.7 of the Code, if and when made. The Offer Cap is not a no increase statement and should not be taken to mean that the Exchange Ratio or Offer Cap cannot be increased in any announcement of a firm intention to make an offer pursuant to Rule 2.7 of the Code.

IP Group reserves the right to make an offer on less favourable terms than those set out in the Possible Offer Announcement (as amended by this announcement) in the event that:

i. an agreement or recommendation in respect of such terms is reached with the Board of Touchstone; or

ii. an offer or possible offer for Touchstone is announced by a third party.

In the event Touchstone announces, declares, pays or makes any dividend or distribution to Touchstone shareholders at any time, IP Group reserves the right to make an equivalent reduction in the terms of the Possible Offer. In addition, IP Group reserves the right to introduce other forms of consideration and/or vary the proposed mix of consideration in any offer.

Important notices

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. This announcement does not constitute a prospectus or a prospectus equivalent document. The shareholders of IP Group and Touchstone are advised to read carefully the formal documentation in relation to the Possible Offer once it has been despatched.

Overseas jurisdictions

The release, publication or distribution of this announcement in 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 requirements. This announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed in this announcement 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.

This announcement is not for publication or 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 1993, 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.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (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 Code, any person who is, or becomes, interested in 1% 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 pm (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 Takeover 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 [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication of this announcement

In accordance with Rule 26.1 of the Code, a copy of this announcement will be available on the website of IP Group at www.ipgroupplc.com/investor-relations/ by no later than 12 noon (London time) on the business day following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement. A further announcement will be made by IP Group as and when appropriate.

Forward-looking statements

This announcement may contain certain 'forward-looking statements'. The forward-looking statements contained in this announcement include statements relating to IP Group's proposal to the Board of Touchstone, and other statements other than historical facts. Forward-looking statements often use words such as 'believe', 'expect', 'estimate', 'intend', 'anticipate' and words of a similar meaning. You should not place undue reliance on these forward-looking statements, which reflect the current views of IP Group, are subject to risks and uncertainties about Touchstone and are dependent on many factors, some of which are outside of the control of IP Group. There are important factors, risks and uncertainties that could cause actual outcomes and results to be materially different, including that there can be no certainty that the approach in respect of the proposed transaction described in this announcement will result in a formal offer, nor as to the terms on which any such offer may be made. Except as required by law, IP Group undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

N M Rothschild & Sons Limited ('Rothschild'), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for IP Group and for no one else in connection with the subject matter of this announcement and Rothschild will not be responsible to anyone other than IP Group for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Numis Securities Limited ('Numis') which is authorised and regulated by the Financial Conduct Authority is acting exclusively for IP Group and no-one else in connection with the subject matter of this announcement and Numis will not be responsible to anyone other than IP Group for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.