Xenith IP Group Ltd (ASX: XIP) share price is currently 20% higher due to an ASX announcement by IPH Ltd (ASX: IPH).
Both of these businesses are legal firms that, as the names might suggest, work as intellectual property companies.
Why has the Xenith share price risen?
Earlier this morning IPH announced it had acquired around 19.9% of Xenith’s shares. IPH said it had done this to “participate in industry consolidation”, where it aims to make domestic acquisitions.
IPH purchased the shares from institutional investors at a price of $1.85 per share, for a total cost of $33 million, which has been funded from debt facilities. This compared to the current share price of $1.70 and yesterday’s share price of $1.40.
However, Xenith is currently going through its own merger with QANTM Intellectual Property Ltd (ASX: QIP), which itself was a takeover target of IPH a few months ago.
IPH doesn’t want the Xenith-QANTM merger to go ahead and wants to acquire one of them instead, although a deal would require ACCC approval.
IPH CEO Andrew Blattman said: “Since listing on the ASX in 2014, IPH has consistently demonstrated its ability to make considered, strategic acquisitions and successfully manage these businesses as part of the IPH group.”
What now?
Xenith said IPH is yet to communicate its intentions with Xenith. The Board of Xenith intends to proceed to merge with QANTM and believes in the potential benefits of the merger.
Until all of this is sorted, the growth shares in the free report below could be better share picks.
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