IP Group proposed firm placing and capital raise

RNS Number : 9307F

IP Group PLC

23 May 2017

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR THE UNITED STATES OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW.  PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT, WHICH DOES NOT CONSTITUTE A PROSPECTUS OR DOCUMENT EQUIVALENT TO A PROSPECTUS, IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES AND NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY CONTRACT OR COMMITMENT WHATSOEVER.  SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION AND THE SECURITIES DESCRIBED HEREIN WILL BE SOLD IN ACCORDANCE WITH ALL APPLICABLE LAWS AND REGULATIONS.

THE DEFINED TERMS SET OUT IN THE APPENDIX APPLY IN THIS ANNOUNCEMENT.

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

23 May 2017

IP Group plc

("IP Group", the "Group" or the "Company")

Proposed Firm Placing and Placing, Open Offer and Offer for Subscription

and Notice of General Meeting

and Launch of IP Group Australia

The Board of IP Group announces that it intends to raise gross proceeds of up to approximately
£200.0 million (approximately £195.7 million net of Capital Raising costs and expenses) in a Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription, consisting of the issue of up to 142,857,136 Capital Raising Shares in aggregate at an issue price of 140 pence per Capital Raising Share. The Board has the ability to increase the size of the Issue by up to £66.6 million by the issue of up to a further 47,571,428 Capital Raising Shares, so that gross proceeds would be approximately £266.6 million (approximately £260.9 million net of all Capital Raising costs and expenses) should there be sufficient demand.

The Company also announces that it is launching IP Group Australia, a wholly-owned private company incorporated in the State of Victoria, Australia, focused on the creation and support of world changing companies in Australia and New Zealand. The Company and IP Group Australia have entered into commercialisation agreements with nine leading Australian and New Zealand research universities (the "Go9 Universities") under which it intends to form spin-out companies based on disruptive IP developed in such universities.

The Company also notes, as separately announced earlier today, that it recently made an approach to the Touchstone Board regarding a possible all-share combination of the Company and Touchstone Innovations.

The Capital Raising is conditional, inter alia, upon Shareholders passing the Resolutions at the General Meeting. The Capital Raising and the Possible Offer are not interconditional and neither is contingent on the other.

IP Group will shortly be publishing a Prospectus in connection with the Capital Raising and will be convening the General Meeting to approve certain matters necessary to implement the proposed Capital Raising.

Summary

·           Issue of 96,428,566 Capital Raising Shares through a Firm Placing raising gross proceeds of £135.0 million. The Firm Placing is underwritten by Numis

·           Issue of up to 46,428,570 Capital Raising Shares pursuant to a non-underwritten Placing, Open Offer and Offer for Subscription to raise gross proceeds of up to approximately £65.0 million

·           Participation in the Capital Raising by new shareholders including Temasek and Telstra Super Pty Ltd and existing shareholders including Invesco, Woodford and Lansdowne

·           Qualifying Shareholders are being offered the opportunity to participate in the Open Offer, on the basis of 1 Open Offer Share for every 13 Record Date Shares

·           Qualifying Shareholders are also being offered the opportunity to subscribe for Capital Raising Shares in addition to their Open Offer Entitlements under the Excess Application Facility

·           The Board has the ability to increase the size of the Capital Raising by up to approximately one third should there be sufficient demand so that the total gross proceeds would be approximately £266.6 million

·           The Capital Raising will strengthen the financial position of the Group, enabling IP Group to deploy further capital into new and existing commercialisation opportunities both in the UK and the US and will provide the necessary capital to successfully launch and develop IP Group Australia

·           The Capital Raising is conditional, inter alia, upon the passing of the Resolutions at the General Meeting.  If the Resolutions are passed and the other conditions to the Capital Raising are satisfied, it is expected that dealings in the Capital Raising Shares will commence at 8.00 a.m. on 9 June 2017

·           The Company separately announced today that it recently made an approach to the Touchstone Board regarding a possible all-share combination of the Company and Touchstone

·           The Capital Raising is not conditional on the Possible Offer and the Possible Offer is not conditional upon the Capital Raising

·     The Directors consider that a combination of the Group and Touchstone would create an international leader in IP commercialisation and an enlarged business with substantial capabilities that would be greater than the sum of the two parts. The combination would allow both the Company's and Touchstone's shareholders to participate in any future value generated by the enlarged Group and its more diversified portfolio.

The Prospectus concerning the Capital Raising will shortly be sent to Shareholders and will also be made available on the Company's website www.ipgroupplc.com/investor-relations. Further details are set out in this announcement and in the Prospectus. A copy of the Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at: http://www.hemscott.com/nsm.do.

Alan Aubrey, Chief Executive Officer of IP Group, said:

"The transactions announced today represent a transformational step forward in IP Group's development. The increased global scale achieved through the Capital Raising, the establishment of IP Group Australia anchored by nine new university agreements, and the possible combination with Touchstone will enable us to build on our strong track record of value creation, partnering with world-leading research universities.

Increasing our capital base will enable us to accelerate the growth of the Group by investing in new and existing portfolio companies, building on our pool of scientific and commercial talent, and attracting further investors and co-investment partners. We are delighted to welcome new investors, including Temasek and Telstra Super Pty Ltd, to our register and would like to thank our existing shareholders for their ongoing commitment and support."

Readers are referred to the important notice that applies to this announcement. Unless otherwise stated, references to time contained in this announcement are to UK time.  This announcement has been issued by and is the sole responsibility of IP Group plc.

Investor and Analyst Conference Call Details

IP Group will host a conference call for investors and analysts today at 9:30am BST. A presentation will be available for download from www.ipgroupplc.com/investor-relations prior to the conference call. For regulatory reasons, this conference call may not be accessed by any person in, and any associated materials may not be released, published, or distributed directly or indirectly, in or into or from the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa or in any jurisdiction where to do so would breach any applicable law.

UK Dial-in: 0800 358 9473

Confirmation Code: 4967 1156 #

For further information contact:

IP Group plc
Alan Aubrey, Chief Executive Officer	[phone]
Greg Smith, Chief Financial Officer	[phone]
Liz Vaughan-Adams, Communications	[phone]/[phone]
Numis Securities Limited (Sponsor, Broker and Joint Financial Adviser)	[phone]
Michael Meade
James Black
Freddie Barnfield
Rothschild (Joint Financial Adviser)	[phone]
Warner Mandel
Anton Black
Peter Nicklin
Noel Monro
Charlotte Street Partners
Andrew Wilson	[phone]
Martha Walsh	[phone]

IMPORTANT NOTICE

This announcement is an advertisement and does not constitute a prospectus or prospectus equivalent document.  Nothing in this announcement should be interpreted as a term or condition of the Open Offer or the Offer for Subscription.  Investors should not subscribe for or purchase any shares in the Open Offer or the Offer for Subscription except on the basis of the information contained in the Prospectus to be published shortly or which is incorporated by reference into the Prospectus.  The Prospectus, when published, will be made available on the Company's website (www.ipgroupplc.com) and will be available for inspection at: http://www.hemscott.com/nsm.do.    

This announcement does not constitute or form part of any offer or invitation to purchase, or otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security in the capital of the Company in any jurisdiction.

The information contained in this announcement is not for release, publication or distribution to persons in the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa or in any jurisdiction where to do so would breach any applicable law.  The Capital Raising Shares have not been and will not be registered under the securities laws of such jurisdictions and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within such jurisdictions except pursuant to an exemption from and in compliance with any applicable securities laws. No public offer of the Capital Raising Shares is being made by virtue of this announcement into Australia, Canada, Japan, New Zealand, the Republic of South Africa or the United States or any other jurisdiction outside the United Kingdom in which such offer would be lawful. No action has been or will be taken by the Company, Numis or any other person to permit a public offering or distribution of this announcement or any other offering or publicity materials or the Capital Raising Shares in any jurisdiction where action for that purpose may be required, other than in 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 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.

This announcement has been issued by and is the sole responsibility of the Company.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for IP Group plc and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than IP Group plc for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in relation to the contents of this announcement or any matters referred to herein.  Numis Securities Limited is not responsible for the contents of this announcement.  Numis Securities Limited has given and not withdrawn its written consent to the issue of this announcement with the inclusion of the reference to its name in the form and context in which it is included.

N M Rothschild & Sons Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting for IP Group Plc and no-one else in connection with the contents of this announcement and will not be responsible to anyone other than IP Group Plc for providing the protections afforded to clients of N M Rothschild & Sons Limited nor for providing advice in connection with the contents of this announcement.

This announcement has been prepared for the purposes of complying with the applicable law and regulation of the United Kingdom 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 and regulations of any jurisdiction outside of the United Kingdom.

Note regarding forward-looking statements:

This announcement includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "anticipates", "believes", "estimates", "expects", "intends", "may", "plans", "projects", "should" or "will", or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include, but are not limited to, statements regarding the Company's and/or Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial position, prospects, growth, strategies and expectations for the Company's or its portfolio companies principal markets.

Any forward-looking statements in this announcement reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. Investors should specifically consider the factors identified in this announcement which could cause actual results to differ before making an investment decision. Subject to the requirements of the Prospectus Rules, the Disclosure Guidance and Transparency Rules, the Listing Rules and the EU Market Abuse Regulation (Regulation 596/2014), none of the Company, the Directors and Numis undertake any obligation publicly to release the result of any revisions to any forward-looking statements in this announcement that may occur due to any change in the Company's expectations or to reflect events or circumstances after the date of this announcement. Past performance of the Company is not necessarily indicative of future performance.

You are advised to read this announcement and, once available the Prospectus and the information incorporated by reference therein, in their entirety for a further discussion of the factors that could affect the Company's or the Group's future performance and the industries in which they operate.  In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this announcement may not occur.

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

Any person receiving this announcement is advised to exercise caution in relation to the Capital Raising. If in any doubt about any of the contents of this announcement, independent professional advice should be obtained.

This summary should be read in conjunction with the full text of the announcement which follows.

Expected timetable

Event	Time/Date
Record Date for entitlement under the Open Offer	5.30 p.m. on 19 May 2017
Announcement of the Capital Raising	23 May 2017
Ex-entitlement date for the Open Offer	23 May 2017
Publication and posting of the Prospectus, Form of Proxy and Application Form	23 May 2017
Open Offer Entitlements credited to stock account of Qualifying CREST Shareholders in CREST	as soon as possible after 8.00 a.m. on 24 May 2017
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements from CREST	4.30 p.m. on 1 June 2017
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 2 June 2017
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 5 June 2017
Latest time and date for receipt of Forms of Proxy and receipt of electronic proxy appointments via the CREST system	11.00 a.m. on 6 June 2017
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions	11.00 a.m. on 7 June 2017
Latest time and date for receipt of completed Subscription Forms and payment in full under the Offer for Subscription or settlement of relevant CREST instructions	1.00 p.m. on 7 June 2017
Latest time and date for receipt of Placing commitments	11.00 a.m. on 7 June 2017
General Meeting	10.00 a.m. on 8 June 2017
Expected date of announcement of results of the General Meeting and the Capital Raising through a Regulatory Information Service	8 June 2017
Expected date of Admission and commencement of dealings in Capital Raising Shares	8.00 a.m. on 9 June 2017
Capital Raising Shares in uncertificated form expected to be credited to accounts as soon as practicable in CREST	9 June 2017
Expected date of despatch of definitive share certificates for Capital Raising Shares in certificated form	week commencing 12 June 2017

The times and dates set out in the expected timetable of principal events above and mentioned throughout this announcement are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Numis, in which event details of the new times and dates will be notified to the FCA, the London Stock Exchange and, where appropriate, Shareholders.

Introduction

The Board announces today that it intends to raise gross proceeds of up to approximately £200.0 million (approximately £195.7 million net of Capital Raising costs and expenses) in the Capital Raising by way of a Firm Placing and a Placing, Open Offer and Offer for Subscription, consisting of the issue of up to 142,857,136 Capital Raising Shares in aggregate at an issue price of 140 pence per Capital Raising Share. 96,428,566 Capital Raising Shares will be issued through the Firm Placing and up to 46,428,570 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription. The Board has the ability to increase the size of the Issue by up to £66.6 million by the issue of up to a further 47,571,428 Capital Raising Shares so that gross proceeds would be approximately £266.6 million (approximately £260.9 million net of all Capital Raising costs and expenses) should there be sufficient demand. The Firm Placing is fully underwritten by Numis.

It is the Board's opinion that the Capital Raising will strengthen the financial position of the Group. Specifically, it will provide the necessary capital to successfully launch and develop IP Group Australia and enable it to deploy further capital into new and existing commercialisation opportunities both in the UK and the US. The Board therefore considers the launch of IP Group Australia and the Capital Raising to be in the best interests of the Company and Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolutions.

The Company also announces that it is launching IP Group Australia, a wholly-owned private company incorporated in the State of Victoria, Australia, focused on the creation and support of world changing companies in Australia and New Zealand. IP Group Australia has entered into commercialisation agreements with the Go9 Universities under which it intends to form spin-out companies based on disruptive IP developed in such universities. As a result, through its existing Partnerships and these new agreements with the Go9 Universities, the Group will have unrivalled access to commercialisable IP from universities whose academic staff have published 14.9% per cent of the world's Top Research.

Possible Offer for Touchstone Innovations plc

The Company also announced earlier today that it recently made an approach to the Board of Touchstone regarding a possible combination with Touchstone (the "Combination"). The Board of Touchstone rejected the proposed Combination.

The IP Group Directors consider that the Combination would create an international leader in IP commercialisation and an enlarged business with substantial capabilities that would be greater than the sum of the two parts. The Combination would allow both IP Group and Touchstone shareholders to participate in any future value generated by the enlarged Group and its more diversified portfolio.

The possible all-share offer for Touchstone is being considered on the basis of the terms set out below (the "Possible Offer"). IP Group has received support for the Possible Offer from Touchstone shareholders representing, in aggregate, 51.8 per cent of Touchstone's issued share capital (further details of the irrevocable undertaking and letters of intent are set out in the 2.4 announcement).

The IP Group Directors look forward to further engagement with Touchstone regarding this proposal.

The Possible Offer

The terms of the Possible Offer would comprise the issue of 2.1490 IP Group shares for each Touchstone share, subject to adjustment as set out below (the "Exchange Ratio") which, prior to the Capital Raise:

·     would result in Touchstone shareholders owning approximately 38 per cent. of the enlarged share capital of IP Group; and

·     implies an offer value of 307 pence per Touchstone share, based on IP Group's closing share price of 143 pence on 22 May 2017.

The Exchange Ratio will be adjusted:

1.   following admission and settlement of the new IP Group shares issued pursuant to the Capital Raise, to take into account the scale of the Capital Raise and the 2.1 per cent. discount offered on IP Group shares offered as part of the Capital Raise. For example, if the amount raised by the Capital Raise is £200 million at 140 pence per IP Group share:

a.   the Exchange Ratio would increase to 2.1581;

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 would remain 307 pence per Touchstone share

2.   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 adjustment (2) above (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.

Background to and reasons for the Possible Offer

The IP Group Directors consider that the combination of Touchstone and IP Group would create an international leader in IP commercialisation and a combined business with substantial capabilities that is greater than the sum of the two parts.

Specifically, the IP Group Directors believe that a combination with Touchstone would provide the combined group with the following key benefits:

1.   An enlarged platform for growth and investment;

2.   A larger portfolio with diversification across sectors and maturity of assets;

3.   An experienced team with complementary industry backgrounds; and

4.   Access to IP developed at Imperial College London and University College London adding to IP Group's existing Partnerships with other leading UK research universities.

General and reservations to the Possible Offer

Under Rule 2.6(a) of the Code, IP Group must, by 5:00 p.m. on 20 June 2017, either announce a firm intention to make an offer in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

IP Group reserves the right to make an offer on less favourable terms than those set out in this announcement in the event that:

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

2.   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.

Background to and reasons for the Capital Raising

Overview of the Company

The Group's business of commercialising scientific and technical innovation developed in leading research institutions was established in 2000. The Group's business model is to form, or assist in the formation of, start-up companies based on disruptive scientific and technical innovation developed from within those institutions, to take a significant minority equity stake in these companies and then to grow the value of that equity over time through taking an active role in the development of these companies. The Group's strategy has been to build significant minority equity stakes across a diversified portfolio of companies falling within its four main sectors of Biotech, Cleantech, Healthcare and Technology designed to achieve strong equity returns over the medium to long term.

An important aspect of the Group's strategy is its ability to access a wide range of leading scientific research through its arrangements (both exclusive and non-exclusive) with leading research intensive institutions.

In the UK the access has been achieved primarily through long-term partnerships with a number of leading research universities. The Group entered into its first long term partnership in 2000. Since this time, the Group has entered into further partnerships and now has direct arrangements covering thirteen of the UK's leading universities.

In addition to these direct contractual arrangements, the Group also has two strategic holdings in Oxford Sciences Innovation plc and Cambridge Innovation Capital plc. Oxford Sciences Innovation plc is the contractually preferred partner of the University of Oxford and provides capital to and develops spin-out companies based on research from the University's Mathematical, Physical and Life Sciences Division and its Medical Sciences Division.  Cambridge Innovation Capital plc supports the growth of innovative businesses located in the "Cambridge Cluster" and is supported by the University of Cambridge's commercialisation office, Cambridge Enterprise. The Group and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities. The Group also is in discussion with other universities in the UK.

 The Group leverages the capabilities of its in-house sourcing team to identify and pursue compelling commercialisation opportunities arising from universities. This New Business and Partnerships team works with the Group's partners to identify promising research and novel disruptive IP on which to create and build new businesses. The Group, through the work of that team, utilises its proprietary hypothesis-based methodologies to assess new opportunities and decide which to progress. These techniques are also used to monitor progress and shape the evolving strategy of the opportunities throughout their life cycle.

The Group has access to intellectual property emanating from research carried out in the United States through its IP commercialisation agreements with five Ivy League universities.

During 2013 and 2014 the Group entered into several pilot phase projects under collaboration agreements with Columbia University, University of Pennsylvania, the University of Pennsylvania's Center for Technology Transfer's UPstart company formation programme and Princeton University. Each collaboration agreement had an initial pilot phase of eighteen months and focused on the identification and potential commercialisation of early stage, proof of principle opportunities based on intellectual property developed at each university.  Each pilot phase was subsequently extended during the course of 2015 and 2016 and the agreements varied to enable the parties to reflect the advancement of their working relationships. The extended agreements are not time limited and continue on a rolling renewal basis subject to their terms.

In addition, in November 2014, the Group launched a commercialisation initiative with FedIMPACT to identify and develop early stage technologies from a distinct group of US Department of Energy National Laboratories. The Group's current relationships through FedIMPACT are with Pacific Northwest National Laboratory, Argonne National Laboratory and The National Renewable Energy Laboratory.  The Group recently entered into pilot agreements with a further two leading US research universities and is currently assessing the first potential spin-out opportunities therefrom.

Subject to completion of the Capital Raising, the Group now has access to intellectual property emanating from research carried out in Australia and New Zealand through its agreements with the Go9 Universities. The Go9 Universities are Monash University, the Australian National University, the University of Adelaide, the University of Melbourne, the University of Queensland, the University of Sydney, the University of Western Australia, UNSW Australia and the University of Auckland. The Australian universities (together called the Go8) comprise Australia's premier group of universities and has educated every Nobel prize winner who attended at an Australian university. Each year the Go8 spends some AU$6 billion on research.

Ninety nine per cent. of Go8 research is ranked as world class and the QS World University rankings has six Go8 universities in its top 100.

The University of Auckland is the largest university in New Zealand and is New Zealand's leading world-ranked university and is in the top 100 in the QS World University rankings.

In addition to its new partnerships in Australia and New Zealand, the Group has been engaging with potential research and funding partners in Singapore and is currently evaluating whether a presence could strengthen the establishment of the Group's position in the wider Asia-Pacific region. The Directors consider that Singapore represents a potential opportunity for the Group to be a global partner to a fast-growing technology ecosystem with leading research institutions and an established network of institutional co-investors. In addition, the Group has had initial exploratory conversations with potential financing partners in China.

As at 31 December, the Group had a portfolio of 90 companies, three multi-sector platforms (OSI, CIC and Frontier IP Group plc ) and 20 de minimis holdings in which its combined stake was valued at approximately £614.0 million. Of the 90 companies (excluding the Group's holdings in OSI, CIC, Frontier IP Group plc and the 20 de minimis holdings) in the Group's portfolio, 76 per cent. of the fair value resides in the ten most valuable companies, many of which have made significant progress in the last twelve months towards achieving key milestones and commercial validation. In 2016, the Group invested a total of £30.1 million in its top ten companies (by value) representing approximately 51.2 per cent. of the £58.8 million aggregate annual investment into the portfolio, which excludes £10.9m invested into the Group's strategic holdings in OSI and CIC. As at 31 December 2016, the aggregate value of the portfolio companies in which the Group had an investment (excluding multi-sector platforms and de minimis holdings), calculated by reference to the Group's holding in such companies and grossed up to reflect their total value exceeded £2.7 billion or approximately £3.3billion including the Group's three holdings in multi-sector platform companies (OSI, CIC and Frontier IP Group plc).

As at 31 December 2016, the Group's portfolio of 90 businesses (excluding three multi-sector platforms and 20 de minimis holdings) consisted of 39 Early-stage businesses, 32 Development stage businesses and 19 Focus stage businesses of which 8 were quoted.

Reasons for the Capital Raising

The Group has built a platform for the systematic commercialisation of intellectual property which has primarily been sourced from within UK, and more recently US, universities or other research intensive institutions with which the Group has Partnerships or other collaborative arrangements.

The Board believes that the formation of IP Group Australia provides the Group with the opportunity to obtain access to a significant source of world-leading academic research via the Go9 Agreements. Through these agreements the Group will seek to create and maintain a pipeline of compelling intellectual property based opportunities and develop and support these opportunities into a diversified portfolio of robust businesses. In so forming spin-out companies based on the intellectual property developed in such universities, the Group seeks to evolve great ideas into world-changing businesses.

The Board believes that the Go9 Universities represent a significant source of potentially world-class and disruptive IP. Three of the Go9 Universities, being the University of Melbourne, the University of Queensland and the University of Sydney, are ranked within the world's top 50 research universities, and five of the other members of the Go9 are within the world's top 200 research universities.

Academic staff at the Go9 Universities have published a total of 4 per cent. of the world's Top Research. The Go9 Agreements that the Company and IP Group Australia have entered into with the Go9 Universities mean that the Group will have access to commercialisable intellectual property from universities whose academic staff have published 14.9 per cent. of the world's Top Research.

The Group considers that IP Group's business model, which it has deployed successfully in the UK and more recently in the US, is well suited to the Australian and New Zealand markets. The Directors believe that the development of spin-out companies based on IP originating from the Go9 Universities represents a significant commercial opportunity.

In addition to the opportunity presented by the launch of IP Group Australia, the Board believes that there is a significant opportunity to accelerate the growth of the Group by increasing its overall rate of investment in both its current portfolio and in new pipeline opportunities in the UK and the US, whilst preserving the returns that it has historically been able to achieve. As companies within the Group's portfolio mature, they generally require an increased level of investment, commensurate with their advancing stage of development, in order to achieve their technical, commercial and strategic objectives. The Board considers that, where such companies continue to make progress towards achieving these objectives, there can be advantages for the Group in maintaining significant minority equity stakes in these companies in order to seek to maximise its level of returns.

The Board considers that the Group is in a highly advantageous position to assess the merits of further investments in its focus stage portfolio companies, given its well-established and in-depth understanding of the relevant company in each case. These investment opportunities are typically more mature (in that technology proof of concept has generally been achieved and demonstrated) and additional capital is required to bring the technology to, or towards, commercial validation. The Capital Raising will enable the Group to continue to have flexibility to lead these subsequent investment rounds in both existing and future focus-stage companies, decreasing its reliance on external capital and allowing it to maintain significant minority equity stakes with a view to continuing to generate strong equity returns.

The Group established an original presence on the east coast of the US in 2013 and has since been growing and developing its operations in the US. The Group now has partnerships with three of the US's leading research universities (being University of Pennsylvania, Princeton University and Columbia University) and has recently entered into pilot agreements with a further two leading US research universities. The Group announced the formation of its first US university spin-out company in December 2014 and it now has holdings in a total of 11 companies based on IP developed in the US universities and DOE Laboratories with whom it has commercial collaboration agreements.

The Directors believe that the US offers a profusion of opportunities to develop potentially world-class IP into spin-out companies and that it has seen only limited systematic commercialisation efforts from third parties to date. The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising will enable the Group to continue to build upon and strengthen its relationships with the US universities and other research institutions with whom it has commercial agreements, in order to deploy capital into commercialisation opportunities based on potentially world class intellectual property arising from the same, and to further augment its reputation in the US marketplace.

The Group will continue to seek to identify disruptive and compelling IP-based opportunities arising from its current UK Partnerships and its current agreements and initiatives within the US, as well as the agreements that it has entered into with the Go9 Universities. In addition, the Group may source further opportunities from or with other leading international research intensive institutions.

The Directors believe that the increased strength of the Group's balance sheet following completion of the Capital Raising, combined with its expanded geographic footprint arising from the launch of IP Group Australia, will enhance the Group's profile internationally and therefore further its ability to:

·     attract new early stage commercialisation opportunities from, and collaborations with, research intensive institutions in the UK, the US, Australia and New Zealand;

·     attract and retain high quality talent within the Group; and

·     attract experienced management teams and co-investment partners, as appropriate, into portfolio companies as they develop.

Current Trading and Prospects

Portfolio Update

The Group's portfolio now comprises holdings in 50 intellectual property based companies categorised within the Focus or Development stage, a further 41 Early stage companies and 3 multi-sector platform holdings. The Group has deployed capital totalling £8.8m to 14 portfolio companies and opportunities.

Outlook

While it is clear that the UK and its economy are facing a period of uncertainty following the outcome of the UK's referendum on its membership of the EU, which may impact on specific funding rounds for companies, it is important to stress that the Group is seeing positive progress across the portfolio, has a strong balance sheet and operations in both the UK and the US. The Group is now commencing operations in Australia and New Zealand building upon the Go9 Agreements. Through diversifying internationally, the Company is reducing any Brexit risk.

The Group was founded on the belief that modern economies need to support innovation in science and technology and to commercially leverage such innovation, and the Directors believe that this remains the case. Further, the Board believes that the fundamentals of the Group's business are strong and that the need for the commercialisation of science remains key. The Board is excited at the prospect of the Possible Acquisition which it considers potentially represents an opportunity to create a stronger UK commercialisation company with greater capabilities.

Principal Terms and Conditions of the Capital Raising

The Company is proposing to raise gross proceeds of up to approximately £200.0 million (approximately £195.7 million net of costs and expenses) by the issue of up to 142,857,136 Capital Raising Shares by way of the Firm Placing and the Placing, Open Offer and Offer for Subscription at 140 pence per Share,  although the Directors have the ability to increase the size of the Issue by up to 47,571,428 Capital Raising Shares such that the gross proceeds would be approximately £266.6 million (approximately £260.9 million net of all Capital Raising costs and expenses) should there be sufficient demand. The Firm Placing is underwritten by Numis. Assuming that the Capital Raising is up to £200.0 million, 96,428,566 Capital Raising Shares will be issued through the Firm Placing and up to 46,428,570 Capital Raising Shares will be issued through the Placing, Open Offer and Offer for Subscription.

The Board considers the Firm Placing and the Placing, Open Offer and Offer for Subscription to be a suitable fundraising structure as it will allow access to a variety of new institutional investors to broaden the Company's shareholder base whilst providing existing Shareholders with the opportunity to participate in the fundraising to an extent through the Firm Placing or the Open Offer and the Excess Application Facility.

Qualifying Shareholders are being offered the right to subscribe for Open Offer Shares in accordance with the terms of the Open Offer. Qualifying Shareholders applying for their Open Offer Entitlements may also apply, under the Excess Application Facility, for Excess Shares in excess of their Open Offer Entitlements as described below. The Company is also seeking to place Placing Shares through the Placing and making the Offer for Subscription as described below.

All elements of the Capital Raising have the same Issue Price. The Issue Price was set having regard to the prevailing market conditions and the size of the Issue and represents a discount of approximately 2.1 per cent. to the Closing Price of 143 pence per Share on 22 May 2017 (being the last Business Day before the announcement of the Capital Raising). The Board believes that both the Issue Price and the discount are appropriate.

The Capital Raising Shares, when issued and fully paid, will rank in full for all dividends or distributions made, paid or declared after Admission and otherwise pari passu in all respects with the Existing Shares. 142,857,136 Capital Raising Shares are to be issued pursuant to the Capital Raising (representing 25.3 per cent. of the existing issued share capital) assuming that it is fully subscribed. On the basis that the Capital Raising size is increased to a maximum of £266.6 million, the Capital Raising is expected to result in 190,428,564 Capital Raising Shares being issued (representing approximately 33.7 per cent. of the existing issued share capital).

As noted above the Directors will have the discretion to increase the size of the Capital Raising from £200.0 million to up to £266.6 million. The Directors may allocate any increase to and between the Excess Application Facility, the Placing and/or the Offer for Subscription as they deem fit.

Some questions and answers in relation to the Open Offer, together with details of the further terms and conditions of the Open Offer, including the procedure for application and payment and the procedure in respect of entitlements not taken up, will be set out in the Prospectus and, where relevant, will be set out in the Application Form.

Details of the further terms and conditions of the Offer for Subscription, including the procedure for application and payment and the procedure in respect of subscription entitlements, will be set out in the Prospectus and, where relevant, will be set out in the Subscription Form. The Subscription Form will be contained in the Prospectus and will be available from the Company's website.

Firm Placing

The Firm Placees have conditionally agreed to subscribe for 96,428,566 Capital Raising Shares in aggregate at the Issue Price (representing gross proceeds of approximately £200.0 million). The Firm Placed Shares are not subject to clawback to satisfy the valid applications by Qualifying Shareholders under the Open Offer and the Excess Application Facility and are not part of the Placing, Open Offer or Offer for Subscription. The Firm Placing is underwritten by Numis. The terms and conditions of the Firm Placing and Placing will be set out in the Prospectus.

Open Offer

The Directors recognise the importance of pre-emption rights to Shareholders and consequently 43,478,612 Capital Raising Shares are being offered to existing Shareholders by way of the Open Offer. The Open Offer provides an opportunity for Qualifying Shareholders to participate in the Capital Raising by both subscribing for their respective Open Offer Entitlements and by subscribing for Excess Shares under the Excess Application Facility, subject to availability.

To the extent that valid applications are not received in respect of Open Offer Shares under the Open Offer, such Open Offer Shares may be allocated to Qualifying Shareholders to meet the valid applications under the Excess Application Facility and/or allocated to the Placing and/or Offer for Subscription.

Open Offer Entitlements

Qualifying Shareholders are being given the opportunity on, and subject to, the terms and conditions of the Open Offer to apply for Open Offer Shares at the Issue Price, pro rata to their holdings of Shares on the Record Date on the basis of:

1 Open Offer Share for every 13 Record Date Shares

Open Offer Entitlements under the Open Offer will be rounded down to the nearest whole number and any fractional entitlements to Open Offer Shares will not be allocated but will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

If you have sold or otherwise transferred all of your Existing Ordinary Shares before the ex-entitlement date, you are not entitled to participate in the Open Offer.

Qualifying Shareholders are also being offered the opportunity to subscribe for Excess Shares in excess of their Open Offer Entitlements pursuant to the Excess Application Facility as described below.

Excess Application Facility

Qualifying Shareholders may apply to subscribe for Excess Shares using the Excess Application Facility, should they wish. Qualifying Non-CREST Shareholders wishing to apply to subscribe for Excess Shares may do so by completing the relevant sections on the Application Form. Qualifying CREST Shareholders who wish to apply to subscribe for more than their Open Offer Entitlements will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to the Prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility.

The Excess Application Facility will comprise Open Offer Shares that are not taken up by Qualifying Shareholders under the Open Offer pursuant to their Open Offer Entitlements and may include Capital Raising Shares not taken up under the Placing or the Offer for Subscription.

The maximum amount of Capital Raising Shares to be issued under the Excess Application Facility (the "Maximum Excess Application Number") will be limited to: (a) the maximum size of the Issue (as it may be increased by the Directors by up to 47,751,428 Capital Raising Shares); less (b) the aggregate of the Firm Placed Shares, the Capital Raising Shares issued under the Open Offer pursuant to Qualifying Shareholders' Open Offer Entitlements and any Capital Raising Shares that the Directors determine to issue under the Placing and/or the Offer for Subscription. Excess Applications will therefore only be satisfied to the extent that: (a) other Qualifying Shareholders do not apply for their Open Offer Entitlements in full; (b) where fractional entitlements have been aggregated and made available under the Excess Application Facility; (c) the Directors do not exercise their discretion to allocate Excess Shares to the Placing and/or the Offer for Subscription; and/or (d) the Directors exercise their discretion to increase the size of the Issue and allocate any further Capital Raising Shares to the Excess Application Facility.

Qualifying Shareholders can apply for up to the Maximum Excess Application Number of Capital Raising Shares under the Excess Application Facility, although if applications exceed the maximum number available, the applications will be scaled back. Excess monies in respect of applications which are not met in full will be returned to the applicant (at the applicant's risk) without interest as soon as practicable thereafter by way of cheque or CREST payment, as appropriate.

Placing

To the extent that either (a) the Directors exercise their discretion to increase the size of the Issue and allocate any of such increase to the Placing and/or (b) any Capital Raising Shares are unallocated via the Excess Application Facility and have not been allocated to the Offer for Subscription, such Capital Raising Shares will be allocated and made available under the Placing. Shares will be allocated to Non-Firm Placees pursuant to, and in accordance with, the Placing Agreement. The Placing will not be underwritten by Numis and may be scaled back in favour of the Offer for Subscription and/or the Excess Application Facility. The terms and conditions of the Placing will be contained in the Prospectus.

Offer for Subscription

To the extent that either (a) the Directors exercise their discretion to increase the size of the Issue and allocate any of such increase to the Offer for Subscription and/or (b) any Capital Raising Shares are unallocated via the Excess Application Facility and have not been allocated to the Placing, such Capital Raising Shares will be allocated to and made available under the Offer for Subscription. The Offer for Subscription may be scaled back in favour of the Placing and/or the Excess Application Facility.

The Offer for Subscription is only being made in the UK but, subject to applicable law, the Company may allot Capital Raising Shares on a private placement basis to applicants in other jurisdictions. The terms and conditions of application under the Offer for Subscription will be set out in the Prospectus and, where relevant, in the Subscription Form. These terms and conditions should be read carefully before an application is made. Investors should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser if they are in doubt.

Dilution

A Qualifying Shareholder who takes up his Open Offer Entitlements in respect of the Open Offer (and does not receive any other Capital Raising Shares pursuant to the Capital Raising, including the Excess Application Facility) will suffer dilution of approximately 14.0 per cent. to his shareholding in the Company as a result of the Capital Raising (assuming that 46,428,570 Capital Raising Shares are issued through the Placing, Open Offer and Offer for Subscription). If a Qualifying Shareholder does not take up his Open Offer Entitlements, such Qualifying Shareholder's holding will be diluted by approximately 20.2 per cent. as a result of the Capital Raising (assuming that such Qualifying Shareholder does not receive any Capital Raising Shares).

If the Directors increase the Capital Raising by £66.6 million through the issue of an additional 47,571,428 Capital Raising Shares at the Issue Price, the size of the Capital Raising will be approximately £266.6 million and if a Qualifying Shareholder does not take up his Open Offer Entitlements, such Qualifying Shareholder's holding will be diluted by approximately 25.2 per cent. as a result of the Capital Raising if subscribed in full. Furthermore, a Qualifying Shareholder who takes up his Open Offer Entitlements in full in respect of the Open Offer (but does not receive for any other Capital Raising Shares under the Excess Application Facility or any other element of the Capital Raising) will suffer dilution of approximately 19.4 per cent. to his shareholding in the Company as a result of the Capital Raising.

Shareholders will be further diluted by the issue of Shares if and when the Possible Acquisition becomes Effective.

Fractions

Fractions of Open Offer Shares will not be allocated to Qualifying Shareholders in the Open Offer and fractional entitlements under the Open Offer will be aggregated and made available under the Excess Application Facility and/or the Placing and/or the Offer for Subscription.

Basis of allocation under the Capital Raising

The Placing may be scaled back in favour of the Offer for Subscription and/or the Excess Application Facility and the Offer for Subscription may be scaled back in favour of the Placing and/or the Excess Application Facility. The Open Offer is being made on a pre-emptive basis to Qualifying Shareholders and is not subject to scaling back in favour of either the Placing or the Offer for Subscription. Any Capital Raising Shares that are available under the Open Offer and are not taken up by Qualifying Shareholders pursuant to their Open Offer Entitlements or allocated under the Excess Application Facility will be reallocated to the Placing and/or the Offer for Subscription and made available thereunder.

The Directors have the discretion to determine the basis of any scaling back or reallocation of Excess Shares to the Placing and/or the Offer for Subscription. In exercising this discretion, the Directors generally intend to give priority to existing Shareholders over prospective new Shareholders, although the Directors will seek to balance the benefits to the Company of allowing existing Shareholders to maintain or increase the size of their relative Shareholdings with expanding the shareholder base of the Company.

Conditionality

The Capital Raising is conditional upon:

·     the passing of the Resolutions without amendment to be proposed at the General Meeting to be held on 8 June 2017;

·     the Placing Agreement having become unconditional in all respects save for the condition relating to Admission and not being terminated in accordance with its terms before Admission occurs; and

·     Admission occurring by not later than 8.00 a.m. on 9 June 2017 (or such later time and date as the Company and Numis may agree, being not later than 8.00 a.m. on 23 June 2017).

The Capital Raising is not conditional upon the Possible Acquisition.

Prior to Admission, Numis may terminate the Placing Agreement in certain defined circumstances. Following Admission, the Placing Agreement cannot be terminated.

If the conditions of the Placing Agreement are not fulfilled on or before 8.00 a.m. on 23 June 2017, application monies will be returned to applicants (at the applicant's risk) without interest as soon as possible thereafter.

Capital Raising Admission

Applications will be made to the UKLA for the Capital Raising Shares to be listed on the premium segment of the Official List and to the London Stock Exchange for the Capital Raising Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Capital Raising Admission is expected to occur on 9 June 2017, when dealings in the Capital Raising Shares are expected to begin.

General meeting

A General Meeting is to be held at the Company's offices at The Walbrook Building, 25 Walbrook, London, EC4N 8AF at 10.00 a.m. on 8 June 2017. The full text of the Notice of General Meeting will be set out in the Prospectus.

At the General Meeting, the Resolutions will be proposed to:

·          approve the Capital Raising;

·          approve the allotment of Capital Raising Shares pursuant to the Capital Raising; and

·          disapply statutory pre-emption rights in relation to the allotment of equity securities for the purpose of the Firm Placing and the Placing, Open Offer and Offer for Subscription, pursuant to section 570 of the Companies Act.

Smaller related party transactions

Invesco Asset Management Limited ("Invesco"), which currently holds 25.4 per cent. of the Company's outstanding share capital, has committed to subscribe for 17,857,142 Firm Placed Shares for a total consideration of approximately £25.0 million. Woodford Investment Management Limited ("Woodford"), which currently holds 14.2 per cent. of the Company's outstanding share capital, has committed to subscribe for 12,142,857 Firm Placed Shares for a total consideration of approximately £17.0 million. Lansdowne Partners ("Lansdowne"), which currently holds 12.2 per cent. of the Company's outstanding share capital, has committed to subscribe for 10,714,285 Firm Placed Shares for a total consideration of approximately £15.0 million. The commitment to subscribe for the aforementioned Firm Placing Shares by each of Invesco, Woodford and Lansdowne, each of which is a substantial shareholder of the Company under Chapter 11 of the Listing Rules, constitutes a related party transaction under Listing Rule 11.1.10 R.

Recommendation

The Board considers the Capital Raising and the passing of each of the Resolutions to be in the best interests of the Company and the Shareholders as a whole.

Accordingly, the Board unanimously recommends that Shareholders vote in favour of each of the Resolutions to be put to the General Meeting as they intend to do, or procure, in respect of their own beneficial holdings, amounting in aggregate to 4,713,446 Shares, representing approximately 0.83 per cent. of the Existing Shares.

It is anticipated that a Prospectus providing further details of the Firm Placing and Placing, Open Offer and Offer for Subscription and convening the General Meeting will be published shortly and posted to Shareholders.  Copies of the Prospectus will be available from the registered office of IP Group at The Walbrook Building, 25 Walbrook, London, EC4N 8AF. The Prospectus will also be available free of charge during normal business hours on any weekday (except Saturdays, Sundays and public holidays) from the date of its publication until Admission at the offices of Pinsent Masons LLP, 30 Crown Place, London EC2A 4ES.

APPENDIX

The following definitions apply throughout this announcement, unless the context otherwise requires:

"Accredited Investor"	an "accredited investor" as defined in Section 501 of Regulation D under the US Securities Act
"Admission"	the admission of the Capital Raising Shares (i) to the premium segment of the Official List and (ii) to trading on the London Stock Exchange's main market for listed securities, becoming effective in accordance, respectively, with LR 3.2.7G of the Listing Rules and paragraph 2.1 of the Admission and Disclosure Standards
"Admission and Disclosure Standards"	the requirements contained in the publication "Admission and Disclosure Standards" containing, amongst other things, the admission requirements to be observed by companies seeking admission to trading on the London Stock Exchange's main market for listed securities
"Application Form"	the personalised  application  form  on  which  Qualifying  Non-CREST Shareholders who are registered on the register of members of the Company at the Record Date may apply for Open Offer Shares under the Open Offer
"Board" or "Directors"	the board of directors of the Company
"Business Day"	any day (excluding Saturdays, Sundays and public holidays) on which banks are open in London for the transaction of normal banking business
"Cambridge Innovation Capital Agreements"	the arrangements entered into on 9 October 2013 between (1) Cambridge Innovation Capital plc and (2) IP2IPO and (1) the University of Cambridge (2) RBC CEES Trustee Limited (3) Cambridge Innovation Capital plc and (4) Cambridge Innovation Capital (Jersey) Limited and the memorandum of understanding between Cambridge Innovation Capital plc and IP2IPO dated 9 October 2013, further details of which are set out in paragraph 14.20 of Part V of the Prospectus
"Capital Raising"	the Firm Placing and the Placing, the Open Offer and the Offer for Subscription
"Capital Raising Shares"	the Firm Placed Shares, the Placing Shares, the Open Offer Shares (including the Excess Shares) and the Offer for Subscription Shares to be allotted and issued by the Company pursuant to the Capital Raising
"Cardiff University Partnership"	means  the  arrangements  entered  into  on  29  November  2006 between (1) Fusion IP, (2) Fusion IP Cardiff Limited, (3) Cardiff University, (4) University College Cardiff Consultants Limited and (5) Cardiff Partnership Fund
"certificated" or "in certificated form"	a share or security which is not in uncertificated form
"CIC"	Cambridge Innovation Capital plc
"City Code"	the City Code on Takeovers and Mergers issued by the Panel
"Closing Price"	the closing middle-market price of a Share as derived from the Daily Official List
"CNAP Partnership"	the arrangements entered into on 19 September 2003 between (1) the University of York, (2) IP2IPO and (3) Amaethon Limited (as subsequently amended on 16 March 2005), further details of which are set out in the Prospectus
"Companies Act"	the Companies Act 2006, as amended
"Company" or "IP Group"	IP Group plc, a company incorporated in England and Wales with registered number 04204490
"CREST"	the relevant system, as defined in the CREST Regulations, for the holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST Regulations)
"CREST Regulations" or "Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 no. 3755), as amended
"Daily Official List"	the daily record setting out the prices of all trades in shares and other securities conducted on the London Stock Exchange
"Disclosure Guidance and Transparency Rules"	the Disclosure Guidance and Transparency Rules of the FCA, as amended from time to time
"DOE Laboratories"	Pacific Northwest National Laboratory, Argonne National Laboratory and National Renewable Energy Laboratory
"EEA"	the European Economic Area
"Effective"	means in the context of the Possible Acquisition, an offer having been declared or become unconditional, or as the case may be, a scheme of arrangement having become effective, in either case, in all respects in accordance with the requirement of the City Code
"Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for Capital Raising Shares in excess of their Open Offer Entitlements provided they have agreed to take up their Open Offer Entitlements in full as set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, the Application Form
"Excess CREST Open Offer Entitlement"	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his Open Offer Entitlements) to apply for Excess Shares, credited to his stock account in CREST, pursuant to the Excess Application Facility, which is conditional on such Qualifying CREST Shareholder agreeing to take up his Open Offer Entitlements in full as set out in the Prospectus
"Excess Shares"	the Capital Raising Shares for which Qualifying Shareholders may apply under the Excess Application Facility
"Excluded Territory" or "Excluded Territories"	Australia, Canada, Japan, New Zealand, the Republic of South Africa and the United States
"Existing Shares"	the Shares in issue as at the date of the Prospectus
"FCA"	the Financial Conduct Authority of the United Kingdom
"FedIMPACT"	FedIMPACT, LLC, a limited liability company incorporated in the State of Delaware
"Firm Placed Shares"	the 96,428,566 new Shares to be allotted and issued by the Company pursuant to the Firm Placing
"Firm Placees"	any persons who have agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing
"Firm Placing"	the conditional placing by Numis, on behalf of the Company, of the Firm Placed Shares pursuant to the Placing Agreement
"Finance Wales"	Finance Wales Investment Limited, a company incorporated in England and Wales with registered number 01833687
"Finance Wales Co-Investment MOU"	means the non-binding agreement entered into on 25 June 2013 between (1) Fusion IP and (2) Finance Wales, further details of which will be set out in the Prospectus
"Form of Proxy"	the form of proxy accompanying the Prospectus for use by Shareholders in relation to the General Meeting
"FSMA"	the Financial Services and Markets Act 2000, as amended
"Fusion IP"	Fusion IP plc, a company incorporated in England and Wales with registered number 05275732, being a wholly owned subsidiary of the Company
"General Meeting"	the general meeting of the Company convened for 10.00 a.m. on 8 June 2017, notice of which will be set out in the Prospectus, and including any adjournment thereof
"Go9 Agreements"	the commercialisation agreements entered into between IP Group Australia, the Company, IP2IPO Asia-Pacific Limited and each of the Go9 Universities
"Go9 Universities"	Monash University, the Australian National University, the University of Adelaide, the University of Melbourne, the University of Queensland, the University of Sydney, the University of Western Australia, UNSW Australia and the University of Auckland or the relevant commercial entity of each such Go9 University" and "Go9 University" shall mean any one of them
"Group"	IP Group and its subsidiary undertakings
"IP2IPO"	IP2IPO, a company incorporated in England and Wales with registered number 04072979, being a wholly owned subsidiary of the Company
"IP Group Australia"	IP2IPO Australia Pty Ltd, a company incorporated in Australia with registered number A.C.N. 617 966 695, being a wholly owned subsidiary of the Company
"Issue"	the issue of Capital Raising Shares pursuant to the Capital Raising
"Issue Price"	140 pence per Capital Raising Share
"KB"	King's College London Business Limited, a company incorporated in England and Wales with registered number 02714181, being a wholly owned subsidiary of King's College London
"King's College London"	King's College London, a body corporate incorporated by RoyalCharter
"King's College London Partnership"	the arrangements entered into on 12 November 2009 between (1) King's College London, (2) KB and (3) IP2IPO, further details of which are set out in the Prospectus
"Listing Rules"	the listing rules made by the FCA under Part VI of FSMA, as amended from time to time
"London Stock Exchange"	London Stock Exchange plc
"Money Laundering Regulations"	the  Money  Laundering  Regulations  2007  (SI  2007/2157),  as amended from time to time
"Non-Firm Placees"	any persons who have agreed or shall agree to subscribe for Placing Shares pursuant to the Placing
"Notice of General Meeting"	the notice of General Meeting set out in the Prospectus;
"Numis"	Numis Securities Limited of The London Stock Exchange Building 10 Paternoster Square, London EC4M 7LT, acting as sponsor, underwriter, broker and joint financial adviser
"Offer for Subscription"	the offer for subscription to the public in the UK of Capital Raising Shares on the terms set out in the Prospectus and subject to the conditions and (where applicable) the Subscription Form
"Offer for Subscription Shares"	the Capital Raising Shares to be allotted and issued by the Company pursuant to the Offer for Subscription as the same may be increased or decreased at the discretion of the Directors as set out in this announcement and the Prospectus
"Official List"	the Official List of the FCA pursuant to Part VI of FSMA
"Open Offer"	the offer to Qualifying Shareholders, constituting an invitation to apply for Open Offer Shares and Excess Shares pursuant to the Excess Application Facility as the same may be increased or decreased at the discretion of the Directors as set out in the Prospectus, on the terms and subject to the conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Application Form
"Open Offer Entitlement"	the pro rata entitlement of each Qualifying Shareholders on the Record Date to apply for Open Offer Shares pursuant to the Open Offer
"Open Offer Shares"	the 43,478,612 Capital Raising Shares to be offered to Qualifying Shareholders under the Open Offer
"OSI"	Oxford Sciences Innovation plc
"Panel"	the Panel on Takeovers and Mergers
"Partnerships"	a long-term arrangement made by the Group with a university or other research intensive institution, including (where relevant), the University of Southampton Partnership, the King's College London Partnership, the University of Leeds Partnership, the University of Surrey Partnership, the University of Bristol Partnership, the CNAP Partnership, the University of York Partnership, the Queen Mary Partnership, the University of Bath Partnership, the University of Glasgow Partnership, the University of Sheffield Partnership, the Cardiff University Partnership, the University of Manchester Partnership, the Finance Wales Co-Investment MOU, the memorandum of understanding with each of the University of Nottingham, Swansea University and the Cambridge Innovation Capital Agreements, the arrangements between the Group and each of Columbia University, University of Pennsylvania and Princeton University, and the initiative with FedIMPACT, LLC
"Placed Shares"	the Firm Placed Shares and those Placing Shares allotted by the Company to Non-Firm Placees pursuant to the Placing
"Placees"	the Firm Placees and the Non-Firm Placees
"Placing"	the conditional subscription by the Non-Firm Placees for the Placing Shares which is subject to scale back as set out in the Prospectus
"Placing Agreement"	the placing agreement dated 23 May 2017 between (1) the Company and (2) Numis, further details of which are set out in the Prospectus
"Placing Shares"	the new Shares to be allotted and issued by the Company to Non-Firm Placees pursuant to the Placing as the same may be increased or decreased at the discretion of the Directors as set out in the Prospectus
"Possible Offer"	The possible all-share offer for Touchstone
"Prospectus"	the prospectus to be issued by the Company in respect of the Capital Raising, together with any supplements or amendments thereto
"Prospectus Rules"	the  prospectus  rules  of  the  UK  Listing  Authority  made  in accordance with section 73A of FSMA, as amended from time to time
"Qualified Purchaser"	qualified purchaser, as defined in section 2(a)(51) of the US Investment Company Act
"Queen Mary Partnership"	the arrangements entered into on 20 July 2006 between (1) QMUL and (2) IP2IPO as amended, further details of which are set out in paragraph 14.10 of Part V of the Prospectus
"QMUL"	Queen Mary and Westfield College University of London, a body incorporated by Royal Charter
"QIB"	qualified institutional buyers, as defined in Rule 144A under the US Securities Act
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Shares in uncertificated form in CREST
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders holding Shares in certificated form
"Qualifying Shareholders"	Shareholders on the register of members of the Company at the Record Date with the exclusion (subject to certain exceptions) of persons with a registered address or located or resident in the US or any other Excluded Territory
"Queen Mary Partnership"	the arrangements entered into on 20 July 2006 between (1) QMUL and (2) IP2IPO as amended, further details of which are set out in the Prospectus
"Record Date"	5:30 p.m. on 19 May 2017
"Record Date Shares"	the Shares in issue as at the Record Date
"Registrars"	Capita  Asset  Services  of  The  Registry,  34  Beckenham  Road Beckenham, Kent BR3 4TU
"Regulation D"	Regulation D under the US Securities Act
"Regulation S"	Regulation S under the US Securities Act
"Regulatory Information Service"	one of the regulatory information services authorised by the UK Listing Authority to receive, process and disseminate regulatory information in respect of listed companies
"Resolutions"	the resolutions to be proposed at the General Meeting (and set out in the Notice of General Meeting) being (1) an ordinary resolution to approve the Capital Raising, (2) an ordinary resolution to authorise the Directors to allot Capital Raising Shares pursuant to the Capital Raising and (3) a special resolution to disapply statutory pre-emption rights in relation to the allotment of equity securities pursuant to the Capital Raising
"Rothschild"	NM Rothschild & Sons Limited, New Court St Swithin's Lane, London, EC4N 8AL, acting as joint financial adviser
"Share"	an ordinary share of 2 pence in the capital of the Company and "Shares" shall be construed accordingly
"Shareholders" and each a "Shareholder"	holders of Shares
"stock account"	an account within a member account in CREST in which a holding of a particular share or other security in CREST is admitted
"Subscription Form"	the application form in Appendix 4 of the Prospectus for use in connection with the Offer for Subscription
"Touchstone"	Touchstone Innovations plc, a company incorporated in England and Wales with registered number 05796766
"Touchstone Directors or Touchstone Board"	the directors of Touchstone
"UK Listing Authority" or "UKLA"	the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA and in the exercise of its functions in respect of admission to the Official List
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"University of Bath Partnership"	the arrangements entered into on 13 December 2007 between (1) the University of Bath, (2) IP2IPO and (3) the Company, further details of which are set out in the Prospectus
"University of Bristol Partnership"	the arrangements entered into on 4 December 2005 between (1) the University of Bristol and (2) IP2IPO, further details of which are set out in the Prospectus
"University of Cambridge"	the Chancellor, Masters and Scholars of the University of Cambridge
"University of Glasgow Partnership"	the arrangements entered into on 10 October 2006 between (1) the University Court of the University of Glasgow and (2) IP2IPO, further details of which are set out in the Prospectus
"University of Leeds Partnership"	the arrangements entered into on 15 July 2005 (as varied by a supplemental agreement dated 17 March 2011) between (1) the University of Leeds, (2) Techtran Group Limited (now IP Assist Services Limited) and (3) the Company, further details of which are set out in the Prospectus
"University of Manchester Partnership"	the arrangements entered into on 25 February 2013 between the University of Manchester (2) the University of Manchester 13 Limited and (3) IP2IPO, as subsequently varied, further details of which are set out in the Prospectus
"University of Oxford"	the Chancellor, Masters and Scholars of the University of Oxford
"University of Sheffield Partnership"	means the arrangements entered into on 26 January 2005 and made between (1) Fusion IP, (2) Fusion IP Trading Limited (now Fusion IP Sheffield Limited), (3) Sheffield University Enterprises Limited and (4) the University of Sheffield, as subsequently varied and the arrangements relating to medical IP entered into on 23 November 2015 between (1) IP2IPO Limited and (2) the University of Sheffield, further details of which are set out in paragraph 14.4 of Part V of the Prospectus
"University of Southampton Partnership"	the arrangements entered into on 20 March 2002, between (1) the University of Southampton, (2) University of Southampton Holdings Limited, (3) IP2IPO, (4) IML and (5) Southampton Asset Management Limited, as subsequently varied, further details of which are set out in the Prospectus
"University of Surrey Partnership"	the arrangements entered into on 9 February 2006 between (1) the University of Surrey and (2) IP2IPO, further details of which are set out in the Prospectus
"University of York Partnership"	the arrangements entered into on 10 March 2006 (as supplemented by a side agreement dated 27 March 2009) between (1) the University of York and (2) IP2IPO, further details of which are set out in the Prospectus
"US Investment Company Act"	the US Investment Company Act of 1940, as amended
"US Securities Act"	the US Securities Act of 1933, as amended

All references to "GBP", "pounds", "pounds sterling", "sterling", "£", "pence" and "p" are to the lawful currency of the UK.

All references to "US dollars" and "US$", are to the lawful currency of the United States.

All references to "AU$", are to the lawful currency of Australia.

All references in this announcement to times are, unless the context otherwise requires, references to the time in London, UK.

TERMS AND CONDITIONS OF THE FIRM PLACING AND THE PLACING

1.            Introduction

Participation in the Firm Placing and/or the Placing is only available to persons who are invited to participate by Numis. These terms and conditions apply to persons making an offer to subscribe for Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing. The Placee hereby agrees with Numis and the Company to be bound by these terms and conditions as being the terms and conditions upon which Firm Placed Shares will be sold under the Firm Placing and Placing Shares will be sold under the Placing. A Placee shall, without limitation, become so bound if Numis confirms its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) to such Placee.

Upon being notified of its allocation of Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing through receipt of a contract note, a Placee shall, subject to the provisions of the Prospectus with respect to the Placed Shares, be contractually committed to acquire the number of Firm Placed Shares and/or Placing Shares allocated to them (subject in the case of the Placing Shares to scaling back in whole or part to satisfy applications under the Excess Application Facility or the Offer for Subscription and/or as determined by the Directors in consultation with Numis) at the Issue Price and to the fullest extent permitted by law, will be deemed to have agreed not to exercise any rights to rescind or terminate or otherwise withdraw from such commitment. Dealing may not begin before any notification is made.

2.            Agreement to acquire Firm Placed Shares and Placing Shares

Each of the Firm Placing and the Placing is conditional upon the following conditions:

(i)           the Resolutions being passed at the General Meeting;

(ii)          the Placing Agreement having become unconditional in all respects save for the condition relating to Admission, and not being terminated in accordance with its terms before Admission becomes effective; and

(iii)          Admission becoming effective by not later than 8.00 a.m. on 9 June 2017 (or such later time and/or date as the Company and Numis may agree (being no later than 23 June 2017) in accordance with the terms of the Placing Agreement).

Subject to the above conditions, a Placee agrees to become a Shareholder and agrees to acquire Firm Placed Shares and/or Placing Shares (as applicable) at the Issue Price. The number of Firm Placed Shares issued to such Placee under the Firm Placing and/or Placing Shares issued to such Placee under the Placing shall be in accordance with the arrangements described above, subject to the provisions of paragraph 6 of these terms and conditions with respect to the Placing Shares.

3.            Payment for Firm Placed Shares and Placing Shares

Each Placee undertakes to pay the Issue Price for each Firm Placed Share and Placing Share issued to such Placee in such manner as shall be directed by Numis. In the event of any failure by a Placee to pay as so directed by Numis, the relevant Placee shall be deemed hereby to have appointed Numis or any nominee of Numis to sell (in one or more transactions) any or all of the Firm Placed Shares and Placing Shares in respect of which payment shall not have been made as so directed and to have agreed to indemnify on demand Numis in respect of any liability for UK stamp duty and/or stamp duty reserve tax arising in respect of any such sale or sales.

4.            Representations and Warranties

By receiving this document, each Placee and, in the case of paragraph 5.15 of these terms and conditions, any person confirming his agreement to subscribe for Firm Placed Shares and/or Placing Shares on behalf of a Placee or authorising Numis to notify a Placee's name to the Registrars, is deemed to acknowledge, agree, undertake, represent and warrant to each of Numis, the Registrars and the Company that:

4.1          the Placee has read the Prospectus in its entirety and acknowledges that its participation in the Firm Placing and/or the Placing (as applicable) shall be made solely on the terms and subject to the conditions set out in these terms and conditions, the Placing Agreement and the Articles. Such Placee agrees that these terms and conditions and the contract note issued by Numis to such Placee represents the whole and only agreement between the Placee, Numis and the Company in relation to the Placee's participation in the Firm Placing and/or the Placing and supersedes any previous agreement between any of such parties in relation to such participation. Accordingly, all other terms, conditions, representations, warranties and other statements which would otherwise be implied (by law or otherwise) shall not form part of these terms and conditions. Such Placee agrees that neither the Company, Numis nor any of their respective officers or directors will have any liability for any such other information or representation and irrevocably and unconditionally waives any rights it may have in respect of any such other information or representation;

4.2          the Placee has the right, power and authority and has taken all action necessary to subscribe for the Placing Shares under the Placing and/or the Firm Placed Shares under the Firm Placing (as applicable) and to execute and deliver all documents necessary for such subscription and to perform any obligations under any contracts resulting therefrom and that the Placee is not otherwise prevented by legal or regulatory restrictions from subscribing for the Placing Shares under the Placing or the Firm Placed Shares under the Firm Placing or acting on behalf of any such person on a non-discretionary basis;

4.3          neither Numis nor any person affiliated with Numis or acting on its behalf is responsible for or shall have any liability for any information, representation or statement contained in this announcement or the Prospectus or any information previously published by or on behalf of the Company or any member of the Group and will not be liable for any decision by a Placee to participate in the Firm Placing and/or the Placing based on any information, representation or statement contained in this announcement, the Prospectus or otherwise;

4.4          the Placee acknowledges that the Capital Raising Shares will be admitted to the Official List, and the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account and that the Placee is able to obtain or access such Exchange Information without undue difficulty and is able to obtain access to such information or comparable information concerning any other publicly traded company whose securities are admitted to the Official List without undue difficulty;

4.5          the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Firm Placing and/or the Placing, and that participation in the Firm Placing and/or the Placing is on the basis that it is not and will not be a client of Numis for the purposes of the Firm Placing and/or the Placing (as applicable) and the Placee acknowledges that neither Numis, nor any person affiliated with Numis, nor any person acting on its behalf has any duties or responsibilities to the Placee for providing the protections afforded to its clients or for providing advice in relation to the Firm Placing and/or the Placing (as applicable) or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of Numis's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

4.6          the Placee has not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in the Prospectus or its investment decision and the Placee has relied on its own investigation with respect to the Firm Placed Shares and/or the Placing Shares (as applicable) and the Company in connection with its investment decision;

4.7          in agreeing to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable), the Placee is only relying on the Prospectus and/or any supplementary prospectus issued by the Company in connection with the Capital Raising (as the case may be) or any regulatory announcement that may be issued by the Company and not on any other information or representation concerning the Group, the Firm Placing, the Placing, the Firm Placed Shares or the Placing Shares;

4.8          save in the event of fraud on its part (and to the extent permitted by the rules of the FCA), neither Numis nor any of its directors or employees shall be liable to a Placee for any matter arising out of the role of Numis as the Company's adviser and broker or otherwise, and that where any such liability nevertheless arises as a matter of law each Placee will immediately waive any claim against Numis and any of its directors and employees which a Placee may have in respect thereof;

4.9          the Placee has complied with all such laws and such Placee will not infringe any applicable law as a result of such Placee's agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing and/or acceptance thereof or any actions arising from such Placee's rights and obligations under their agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing (as applicable) and/or acceptance thereof or under the Articles;

4.10        the Placee has accepted that its application is irrevocable and if for any reason it becomes necessary to adjust the expected timetable as set out in the Prospectus, the Company will make an appropriate announcement to a Regulatory Information Service giving details of the revised dates. In particular, the Company shall, in agreement with Numis, be entitled to extend the last time and/or date for applications under the Firm Placing and/or the Placing, and any such extension will not affect applications already made, which will continue to be irrevocable;

4.11        to the fullest extent permitted by law, the Placee acknowledges and agrees to the disclaimers contained in this announcement and the Prospectus and acknowledges and agrees to comply with the selling restrictions set out in this announcement and the Prospectus;

4.12        the Shares have not been and will not be registered under the US Securities Act, or under the securities legislation of, or with any securities regulatory authority of, any state or other jurisdiction of the United Sates or under the applicable securities laws of any other Excluded Territories or where to do so may contravene local securities laws or regulations;

4.13        the Placee is either: (i) located outside the United States and is not a US person as defined in Regulation S and is subscribing for Firm Placed Shares and/or Placing Shares only in "offshore transactions" as defined in and pursuant to Regulation S; or (ii) either (a) a QIB or (b) an Accredited Investor and that is, in the case of either (ii) (a) or (ii) (b), a Qualified Purchaser subscribing for Firm Placed Shares and/or Placing Shares in a private placement transaction falling within the exemption from registration provided by Section 4(a)(2) under the US Securities Act;

4.14        the Placee is not subscribing for Firm Placed Shares and/or Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or by means of any form of "general solicitation" or "general advertising" as such terms are defined in Regulation D under the US Securities Act;

4.15        other than in relation to Placees that fall within 5.13 (ii) above or 5.16, 5.17 or 5.18 below, the Placee is not a resident of the United States or any other Excluded Territory, in the case of 5.13(i) above, and acknowledges that the Firm Placed Shares and the Placing Shares have not been and will not be registered nor will a prospectus be prepared in respect of the Firm Placed Shares and the Placing Shares under the securities legislation of the United States or any other Excluded Territory or, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into those jurisdictions;

4.16        if the Placee is in Australia, the Placee is a person to whom an offer of shares for issue may be lawfully made without disclosure under Part 6D.2 of the Corporations Act 2001 (Cth) because of sections 708(8) to 708(11) of that act;

4.17        if the Placee is in Singapore, (a) the Placee is an "accredited investor" or "institutional investor" within the meaning of the term as defined in section 4A of the Securities and Futures Act, Chapter 289 of Singapore ("SFA"); and (b) the Placee will not sell the Capital Raising Shares within six (6) months from the date of acquisition of the Capital Raising Shares, except to any "relevant person" (as defined in Part XIII Division 1 Subdivision 4 of the SFA) or "institutional investor" (as defined in Part I of the SFA) or person pursuant to an offer referred to in Section 275(1A) of the SFA and if the Capital Raising Shares are sold within six (6) months from the date of acquisition of the Capital Raising Shares, the Placee shall procure the purchaser of such Capital Raising Shares undertakes to comply with such on-selling restrictions for the relevant duration;

4.18        if the Placee is in the People's Republic of China ("PRC"), the Placee is entitled to subscribe for the Capital Raising Shares under the laws of PRC and that the Placee has fully observed such laws and obtained all governmental approvals, permits, registrations, filings or authorizations and other consents which may be required to be observed and obtained by the Placee under such laws and complied with all necessary formalities as required for its entering into and performing its obligations hereunder and, to the Placee's knowledge (having made due and careful enquiry of any nominee), the Placee has not taken any action or omitted to take any action which could result in the Company or any of its advisers, officers, directors, agents or employees acting in breach of any applicable law or regulatory requirement of the PRC in connection with the Capital Raising;

4.19        the Placee does not have a registered address in, and is not a citizen, resident or national of, any jurisdiction in which it is unlawful to make or accept an offer of the Firm Placed Shares or Placing Shares and it is not acting on a non-discretionary basis for any such person;

4.20        the Placee has not, directly or indirectly, distributed, forwarded, transferred or otherwise transmitted this document or any other offering materials concerning the Firm Placing or the Placing to any persons within the United States or any other Excluded Territory, nor will it do any of the foregoing;

4.21        the Placee accepts that if either or both of the Placing or the Firm Placing does not proceed or the conditions to the Placing Agreement are not satisfied or the Placing Shares or Firm Placed Shares for which valid applications are received and accepted are not admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities for any reason whatsoever then none of Numis or the Company, nor persons controlling, controlled by or under common control with any of them nor any of their respective employees, agents, officers, members, stockholders, partners or representatives, shall have any liability whatsoever to it or any other person;

4.22        in the case of a person who confirms to Numis on behalf of a Placee an agreement to purchase Firm Placed Shares under the Firm Placing and/or Placing Shares under the Placing and/or who authorises Numis to notify such Placee's name to the Registrars, that person represents and warrants that he has authority to do so on behalf of the Placee;

4.23        the Placee has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Anti-Terrorism Crime and Security Act 2001 and the Money Laundering Regulations and undertakes to provide satisfactory evidence of its identity within such reasonable time (in each case to be determined in the absolute discretion of Numis) to ensure compliance with the Money Laundering Regulations and that if it is making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Money Laundering Regulations;

4.24        the Placee is not, and is not applying as nominee or agent for, a person to whom the issue would give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depository receipts and clearance services) and that the Firm Placed Shares and/or the Placing Shares (as applicable) are not being acquired in connection with arrangements to issue depository receipts or to issue or transfer Firm Placed Shares and/or Placing Shares (as applicable) into a clearing system;

4.25        if the Placee is resident in the EEA, it is a "qualified investor" within the meaning of the law in the Relevant Member State implementing Article 2(1)(e)(i), (ii) or (iii) of the Prospectus Directive (Directive 2003/71/EC);

4.26        the Placee has not offered or sold and will not offer or sell any Firm Placed Shares and/or Placing Shares (as applicable) to persons in the UK prior to Admission except to "qualified investors" as defined in Article 2(1)(e) of the Prospectus Directive;

4.27        the Placee is (a) a person falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "FPO") or (b) a person falling within article 49(2)(a) to (d) of the FPO and undertakes that it will acquire, hold, manage or dispose of any Firm Placed Shares and/or Placing Shares that are allocated to it for the purposes of its business and/or (c) a person to whom the Prospectus may otherwise be lawfully communicated;

4.28        the Placee has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Firm Placed Shares or the Placed Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person;

4.29        the exercise by Numis of any rights or discretions under the Placing Agreement shall be within its absolute discretion and Numis need not have any reference to any Placee and shall have no liability to any Placee whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it shall have no rights against Numis or its directors or employees under the Placing Agreement;

4.30        the Placee acknowledges that any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA. The Placee further acknowledges that the money will not be subject to the protections conferred by the client money rules. As a consequence, this money will not be segregated from Numis' money in accordance with the client money rules and will be used by Numis in the course of its own business and the Placee will rank only as a general creditor of Numis;

4.31        the Placee accepts that the allocation of Placing Shares and/or Firm Placed Shares shall be determined by Numis in its absolute discretion but in consultation with the Company and that Numis may scale down any commitments for this purpose on such basis as it may determine; and

4.32        time shall be of the essence as regards its obligations to settle payment for the Placing Shares and/or the Firm Placed Shares and to comply with its other obligations under the Placing or Firm Placing.

The Placee acknowledges and understands that the Company and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, agreements, acknowledgements and undertakings.

The Placee indemnifies on an after-tax basis and agrees to hold harmless the Company and Numis and each person affiliated with the Company or Numis and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in these terms and conditions and further agrees that the provisions in these terms and conditions shall survive after completion of the Firm Placing and the Placing.

5.            Scaling back of the Placing Shares

The Placing Shares to be issued under the Placing are subject to scaling back in whole or part, at the discretion of the Directors (in consultation with Numis), to satisfy applications under the Excess Application Facility and/or the Offer for Subscription.

6.            Miscellaneous

The rights and remedies of Numis, the Registrars and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

On application, each Placee may be asked to disclose, in writing or orally to Numis:

(i)           if he is an individual, his nationality; or

(ii)          if he is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents will be sent at the Placee's risk. They may be sent by post to such Placee at an address notified to Numis.

The provisions of these terms and conditions of the Firm Placing and the Placing may be waived, varied or modified as regards specific Placees or on a general basis by Numis in its sole discretion with the consent of the Company.

The contract to subscribe for Firm Placed Shares and/or Placing Shares and the appointments and authorities mentioned herein will be governed by, and construed in accordance with, the laws of England. For the exclusive benefit of Numis, the Company and the Registrars, each Placee irrevocably submits to the exclusive jurisdiction of the courts of England in respect of these matters. This does not prevent an action being taken against a Placee in any other jurisdiction. Each Placee waives any objection to proceedings in the courts of England on the ground of venue or on the ground that proceedings have been brought in an inconvenient forum.

In the case of a joint agreement to subscribe for Firm Placed Shares and/or Placing Shares, references to a "Placee" in these terms and conditions are to each of such Placees and such joint Placees' liability is joint and several.

In addition to the provisions of paragraph 6 of these terms and conditions, Numis and the Company each expressly reserve the right to modify the Firm Placing and/or the Placing (including, without limitation, its timetable and settlement) at any time before allocations of Firm Placed Shares under the Firm Placing and/or of Placing Shares under the Placing are determined.

 

END

 

 

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