IP Group PLC (LSE:IPO), the London-listed investor that backs science and technology start-ups, has rejected a £616 million takeover approach from its largest shareholder.
The approach came from Railpen, which manages the Railways Pension Scheme and holds 18.4% of IP Group.
Railpen disclosed on Monday that it had spent several months exploring a possible offer for the whole company, with help from the IP Group board.
Its most recent proposal, put to the board on 16 June, valued IP Group at about 69.7p a share, with up to a further 5p available later.
That total comprised 59p in cash, a mechanism to pass through the value of IP Group's stake in Oxford Nanopore Technologies, worth roughly 10.7p a share, and a contingent payment tied to any sale of drug developer Istesso.
The cash element alone represented a 48% premium to IP Group's adjusted share price on 25 March, the day activist investor Saba Capital Management lifted its holding to 12.01%.
Railpen argues that IP Group, which has long traded at a discount to its net asset value, would fare better away from public markets.
The pension fund said the discount had hampered IP Group's ability to raise fresh equity and back its companies.
It wants to assemble a consortium of pension funds managing more than £235 billion to provide long-term capital, and would reinvest its entire current stake.
Railpen has until 5pm on 20 July to announce a firm intention to bid or walk away, under takeover rules.
