Offer for Touchstone Innovationsplc by IP Groupplc

RNS Number : 6249I

IP Group PLC

20 June 2017

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

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

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

20 June 2017

Offer for Touchstone Innovations plc by IP Group plc

Summary

· Further to the announcements made by IP Group plc ("IP Group" or the "Company") on 23^rd May 2017 (the "Possible Offer Announcement") and on 8^th June 2017, the Board of IP Group is pleased to announce the terms of an offer to be made by IP Group for the whole of the issued and to be issued share capital of Touchstone Innovations plc ("Touchstone") to be effected by means of a takeover offer under the City Code on Takeovers and Mergers (the "City Code") and within the meaning of Part 28 of the Companies Act (the "Offer")

· Under the terms of the Offer, holders of Touchstone Shares will be entitled to receive:

2.1575 New IP Group Shares in exchange for each Touchstone Share

(the "Exchange Ratio")

· The financial terms of the Offer remain unchanged from those set out in the Possible Offer Announcement, as adjusted for the Capital Raise

· Based on the Exchange Ratio and the Closing Price of 134 pence per IP Group Share on 19 June 2017 (being the last Business Day prior to the date of this Announcement), the Offer values each Touchstone Share at 289 pence and Touchstone's existing issued ordinary share capital at approximately £466 million

· Assuming acceptance of the Offer in full, the Offer will result in Touchstone Shareholders owning approximately 33 per cent. and IP Group Shareholders owning approximately 67 per cent. of the Combined Group

· The Exchange Ratio will be adjusted:

1. Following admission and settlement of 16,500,000 new IP Group Shares to be issued to Beijing Galaxy World Group ("Galaxy"). In this case the Exchange Ratio would increase to 2.1584.

As noted in IP Group's announcement on 8^th June 2017, the settlement of the Galaxy investment is subject to foreign exchange and other regulatory reviews. In the event that the outcome of these regulatory reviews is not known prior to the sooner to occur of Completion or Day 45, the Exchange Ratio will increase to 2.1584 subject to further adjustment below. If the relevant permissions for the Galaxy investment have been declined by Day 45 (and the Offer has not become or been declared unconditional as to acceptances) then no adjustment will be made.

2. If, as a result of an increase in the price of IP Group Shares, the implied offer value per Touchstone Share were to become worth more than 320 pence. In such event, the number of New 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 "Offer Cap"). Any adjustment to the Exchange Ratio will be finally determined at Completion and the implied offer value per Touchstone Share will be calculated by reference to the average of the daily volume weighted average prices of an IP Group Share (sourced from Factset) over the 30 Business Days prior to the Completion Date and will be rounded to four decimal places. 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

· The Board of IP Group believes that the combination of IP Group and Touchstone 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

· The Offer will allow Touchstone's Shareholders to continue to benefit from exposure to Touchstone's investments and, through IP Group, gain access to its portfolio. The Offer will also provide Touchstone's shareholders with an opportunity to hold shares in a Combined Group which the IP Directors expect to have greater liquidity than is currently the case

· IP Group attaches great importance to the skills and experience of the existing management and employees of Touchstone and has always intended to leverage the strengths of both businesses and to build on the expertise, networks and relationships developed in both companies. Consequently, IP Group expects expanded job and career opportunities for colleagues from both firms

· IP Group's wider proposal to Touchstone provided:

o Two non-executive directors on the Touchstone Board to become non-executive directors of the Combined Group, one to become senior independent director and the other to be appointed as chair of the remuneration committee, as selected by IP Group;

o Russ Cummings to join the board of the Combined Group as CEO of Touchstone and, together with IP Group's COO, to lead an integration team to identify, retain and build on the best of both companies;

o The three current executive directors of Touchstone to join the executive committee of the Combined Group during the integration period;

o Confirmation of IP Group's intention to continue the ordinary course operation of both companies' investment teams and maintain stable headcount in both investment divisions for a minimum of 12 months; and

o Confirmation that two of Touchstone's focus areas for investment, therapeutics and digital, are consistent with IP Group's current four sectors, Biotech, Cleantech, Healthcare and Technology and that we would therefore envisage continuing to support companies in these scientific areas in the Combined Group.

· IP Group and its advisors have had a number of conversations with Touchstone and its advisors over the last three months regarding variations of this proposal. As recently as 16 June, this proposal was rejected by Touchstone as the basis for a recommended deal. However, IP Group remains committed to all five elements of its proposal listed above

· IP Group has received support for the Offer from holders of Touchstone Shares representing, in aggregate, 74.3 per cent. of Touchstone's issued share capital. Since the Possible Offer Announcement, IP Group has sought further discussions with the Touchstone Board regarding the Offer. Although a recommendation could not be reached, the Board of IP Group believes that Touchstone Shareholders should have the opportunity to decide on the merits of the Offer

· After the Offer becomes or is declared unconditional in all respects and IP Group has by virtue of its shareholdings and acceptances of the Offer acquired, or agreed to acquire, share capital representing of at least 75 per cent. of the voting rights of Touchstone, IP Group intends to procure the making of an application by Touchstone for cancellation of the trading in Touchstone Shares on AIM

· As a result of its size, the Offer constitutes a Class 1 transaction by IP Group for the purposes of the Listing Rules. Accordingly, IP Group will be required to seek the approval of IP Group Shareholders for the Offer at the IP Group General Meeting. The Offer will also be conditional on the approval by IP Group Shareholders of the issue of the New IP Group Shares at the IP Group General Meeting. The IP Group Directors consider the Offer to be in the best interests of IP Group and IP Group Shareholders as a whole and intend to recommend unanimously that IP Group Shareholders vote in favour of all of the resolutions to be proposed at the IP Group General Meeting which will be convened in connection with the Offer

· Commenting on the Offer, Alan Aubrey, CEO of IP Group, said:

"We believe that the combination of IP Group and Touchstone Innovations creates an international leader in IP commercialisation and a business that is greater than the sum of the two parts.

IP Group and Touchstone operate in a sector that historically has been funded by a small group of shareholders who have shown continued support and commitment to the innovation industry in the UK. Through our recent capital raise, IP Group has brought new investors into the sector from Australia, Singapore, China and the UK. The Board believes that, with its larger and more diversified portfolio, the Combined Group will be even more attractive not only to current and potential new investors but also to other stakeholders including university partners and talent.

The Board recognises the skills and expertise of the employees of both companies and continues to believe that the Combined Group will lead to greater opportunities for team members on both sides. I look forward to discussing these opportunities and the proposals we have detailed above with IP Group and Touchstone employees at the earliest opportunity.

Our preference has always been to announce an offer with the full support of the Board of Touchstone. We had a number of constructive conversations with the management of Touchstone, in particular around building on the Combined Group. Unfortunately, we could not come to an agreement with the Touchstone Board. We believe that our offer is attractive for the reasons listed above and have decided to make a firm offer directly to the Touchstone shareholders.

We remain open to engagement with the Touchstone Board at any point regarding our Offer."

Irrevocables and Letters of Intent

IP Group has received irrevocable undertakings and letters of intent in support of the Possible Offer from Touchstone Shareholders representing, in aggregate, 74.3 per cent of Touchstone's issued share capital.

IP Group has received hard irrevocable undertakings to accept the Offer from each of Invesco Asset Management Limited ("Invesco"), Woodford Investment Management Limited ("Woodford") and Lansdowne Developed Markets Master Fund Limited ("Lansdowne"), in respect of shares representing, in aggregate, approximately 29.9995 per cent. of Touchstone's existing issued ordinary share capital on 19 June 2017 (being the last Business Day prior to the release of this Announcement).

IP Group has also received non-binding letters of intent from each of Invesco, Woodford and Lansdowne in respect of shares representing, in aggregate, approximately 44.3346 per cent. of Touchstone's existing issued ordinary share capital on 19 June 2017.

Further details of these hard irrevocable undertakings and non-binding letters of intent are set out at paragraph 10 and Appendix 3 to this Announcement.

General

It is intended that the Offer will be implemented by way of a takeover offer (as defined in Part 28 of the Companies Act), further details of which are contained in the full text of this Announcement and which will be set out in the Offer Document. IP Group does however, reserve the right, with the consent of the Panel to implement the Offer by way of a court-sanctioned scheme of arrangement between Touchstone and the Touchstone Shareholders under Part 26 of the Companies Act.

The Offer will be subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance (in respect of Touchstone Shareholders who hold Touchstone Shares in certificated form) , including valid acceptances having been received in respect of not less than 75 per cent (or such lesser percentage as IP Group may decide) of the Touchstone Shares to which the Offer relates and of the voting rights attached to those Touchstone Shares. The Conditions include the receipt of antitrust approval and other regulatory consents as further described in Part A of Appendix 1 to this Announcement.

The Offer Document and (in respect of Touchstone Shareholders who hold Touchstone Shares in certificated form) the Form of Acceptance will be despatched to Touchstone Shareholders within 28 days of the date of this Announcement or such later date as IP Group decides, with the consent of the Panel. The Offer is expected to become unconditional in all respects during the third quarter of 2017, subject to the satisfaction (or, where applicable, waiver) of the Conditions set out in Appendix 1 to this announcement.

It is expected that the Circular, containing details of the Offer and notice of the IP Group General Meeting, will be posted to IP Group Shareholders at the same time as the Offer Document is posted to Touchstone Shareholders.

This summary should be read in conjunction with the full text of this summary and this Announcement and the Appendices. The Offer will be subject to the Conditions and further terms set out in Appendix 1 to this Announcement and to the full terms and conditions which will be set out in the Offer Document.

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

Appendix 3 contains details of the irrevocable undertakings and letters of intent received in relation to the Offer that are referred to in this summary and this Announcement.

Appendix 4 contains definitions of certain terms used in this summary and this Announcement.

Enquiries:

IP Group plc
Alan Aubrey, Chief Executive Officer	+44 (0) 20 7444 0050
Greg Smith, Chief Financial Officer	+44 (0) 20 7444 0070
David Baynes, Chief Operating Officer	+44 (0) 20 7444 0082
Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0062/+44 (0) 7979 853802

Rothschild (Lead Financial Adviser)	+44 (0) 20 7280 5000
Warner Mandel
Anton Black

Numis Securities Limited (Sponsor, Joint Financial Adviser and Broker)	+44(0) 20 7260 1000
Michael Meade
James Black
Freddie Barnfield

Charlotte Street Partners
Andrew Wilson	+44 (0) 7810 636995
Martha Walsh	+44 (0) 7876 245962

Pinsent Masons LLP are retained as legal advisers for IP Group.

Further Information

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

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

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

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

Information Relating to Touchstone Shareholders

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

Overseas Jurisdictions

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

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

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

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

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

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

Important Notices Relating to Financial Advisers

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

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

Cautionary Note Regarding Forward-Looking Statements

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

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

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

Rounding

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

No Profit Forecasts or Estimates

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

Dealing and Opening Position Disclosure Requirements

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

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

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

Publication on website and availability of hard copies

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

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

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

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

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

20 June 2017

Offer for Touchstone Innovations plc

1. Introduction

The Board of IP Group plc ("IP Group" or the "Company") is pleased to announce the terms of an all-share offer for Touchstone, to be effected by means of a takeover offer under the City Code on Takeovers and Mergers (the "City Code") and within the meaning of Part 28 of the Companies Act (the "Offer").

2. The Offer

Under the terms of the Offer, which will be subject to the Conditions and other terms set out in this Announcement and the full terms and conditions which will be set out in the Offer Document and the Form of Acceptance, the holders of Touchstone Shares will be entitled to receive:

2.1575 New IP Group Shares in exchange for each Touchstone Share

(the "Exchange Ratio")

The financial terms of the Offer remain unchanged from those set out in the Possible Offer Announcement, as adjusted for the Capital Raise.

Based on the Exchange Ratio and the Closing Price of 134 pence per IP Group Share on 19 June 2017 (being the last Business Day prior to the date of this Announcement), the Offer values each Touchstone Share at 289 pence and Touchstone's existing issued ordinary share capital at approximately £466 million.

Assuming acceptance of the Offer in full, Touchstone Shareholders would own approximately 33 per cent. and IP Group Shareholders would own approximately 67 per cent. of the Combined Group.

The Exchange Ratio will be adjusted:

1. Following admission and settlement of 16,500,000 new IP Group Shares to be issued to Beijing Galaxy World Group ("Galaxy"). In this case the Exchange Ratio would increase to 2.1584.

As noted in IP Group's announcement on 8^th June 2017 the settlement of the investment from Galaxy is subject to foreign exchange and other regulatory approvals and will therefore be subject to delayed settlement and admission being not later than 8:00am on 18 August 2017. This subscription is subject to approvals outside the control of IP Group and Galaxy and there is therefore no certainty of these shares being issued. In the event that the outcome of these regulatory reviews is not known prior to the sooner to occur of Completion or Day 45, the Exchange Ratio will increase to 2.1584 subject to further adjustment below. If the relevant permissions for the Galaxy investment have been declined by Day 45 (and the Offer has not become or been declared unconditional as to acceptances) then no adjustment will be made.

2. if, as a result of an increase in the price of IP Group Shares, the implied offer value per Touchstone Share were to become worth more than 320 pence. In such event, the number of New 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 "Offer Cap"). Any adjustment to the Exchange Ratio will be finally determined at Completion and the implied offer value per Touchstone Share will be calculated by reference to the average of daily volume weighted average prices of an IP Group Share over the 30 Business Days prior to the Completion Date and will be rounded to four decimal places. 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.

The Offer will remain open for acceptances for at least 14 days following the announcement of the final Exchange Ratio.

The New IP Group Shares will be issued credited as fully paid and will rank pari passu in all respects with the IP Group Shares in issue at the time the New IP Group Shares are issued pursuant to the Offer.

Applications will be made to the UK Listing Authority for the New IP Group Shares to be admitted to the Official List and to the London Stock Exchange for the New IP Group Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.

The Touchstone Shares will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances and rights of pre-emption and any other interests of any nature whatsoever and together with all rights attaching thereto.

3. Background to and reasons for the Offer

The Board of IP Group continues to believe that the combination of Touchstone and IP Group will create an international leader in IP commercialisation and a combined business with substantial capabilities that is greater than the sum of the two parts.

Funding for the innovation sector in which Touchstone and IP Group operate has historically been supported by a concentrated pool of capital. IP Group has successfully introduced new investors to the sector through its recent capital raise and we believe that the Combined Group, with its enlarged platform, will be even more attractive to current and new potential investors and broader pools of capital.

Since the Possible Offer Announcement, IP Group has sought further discussions with the Touchstone Board regarding the Offer. Although a recommendation could not be reached, the Board of IP Group believes that Touchstone Shareholders should now have the opportunity to decide on the merits of the Offer.

In setting the Exchange Ratio, the Board of IP Group has considered the recent and medium term market valuations of Touchstone and IP Group, as well as the relative valuations of their respective portfolios; metrics which, in IP Group's view, represent the most reasonable indication of the underlying value of each company and a fair basis on which to combine the two companies.

Through the issuance of New IP Group Shares in the Combined Group to Touchstone Shareholders, the Offer allows Touchstone Shareholders to continue to benefit from exposure to Touchstone's investments and, through IP Group, gain access to its portfolio. The Offer also provides Touchstone Shareholders with an opportunity to hold shares in a Combined Group which the IP Directors expect to have greater liquidity than is currently the case.

IP Group has received support for the Offer from holders of Touchstone Shares representing, in aggregate, 74.3 per cent. of Touchstone's issued share capital.

4. Management, employees, branding and locations

IP Group attaches great importance to the skills and experience of the existing management and employees of Touchstone and expects that they will contribute to the future success of the Combined Group. Accordingly, following completion of the Offer, IP Group will ensure that the existing contractual and statutory employment rights of the employees of Touchstone are fully safeguarded and that Touchstone continues to comply with its pension obligations.

IP Group and Touchstone have highly complementary businesses. As such, IP Group expects Touchstone's management and employees to play an important role in the Combined Group and it has always intended to leverage the strengths of both businesses and to build on the expertise, networks and relationships developed in both companies. Consequently, IP Group sees expanded job and career opportunities for colleagues from both firms.

IP Group's wider proposal to Touchstone provided:

· Two non-executive directors on the Touchstone Board to become non-executive directors of the Combined Group, one to become senior independent director and the other to be appointed as chair of the remuneration committee, as selected by IP Group;

· Russ Cummings to join the board of the Combined Group as CEO of Touchstone and, together with IP Group's COO, to lead an integration team to identify, retain and build on the best of both companies;

· The three current executive directors of Touchstone to join the executive committee of the Combined Group during the integration period;

· Confirmation of IP Group's intention to continue the ordinary course operation of both companies' investment teams and maintain stable headcount in both investment divisions for a minimum of 12 months; and

· Confirmation that two of Touchstone's focus areas for investment, therapeutics and digital, are consistent with IP Group's current four sectors, Biotech, Cleantech, Healthcare and Technology and that we would therefore envisage continuing to support companies in these scientific areas in the combined group.

IP Group and its advisors have had a number of conversations with Touchstone and its advisors over the last three months regarding variations of this proposal. As recently as 16 June, this proposal has been rejected by Touchstone as the basis for a recommended deal. However, IP Group remains committed to the principles of all five elements of its proposal listed above

It remains IP Group's intention to establish a joint integration planning committee comprising senior managers from both IP Group and Touchstone to develop an integration plan as part of the next phase. At this stage, IP Group expects this process to take place over a period of up to 12 months following Completion.

At this stage and given the lack of access that IP Group has had to the Touchstone business, IP Group has not yet formulated any detailed proposals for combining Touchstone with IP Group and is unable to be certain what impact there will be on the employment of the Combined Group, or the location of its places of business or any redeployment of fixed assets, although it is anticipated that following Completion certain functions which have historically been related to Touchstone's status as a listed company may no longer be required or will be reduced in size.

5. Recommendation to IP Group Shareholders

As a result of its size, the Offer constitutes a Class 1 transaction by IP Group for the purposes of the Listing Rules. Accordingly, IP Group will be required to seek the approval of IP Group Shareholders for the Offer at the IP Group General Meeting. The Offer will also be conditional on the approval by IP Group Shareholders of the issuance of the New IP Group Shares at the IP Group General Meeting. The IP Group Directors consider the Offer to be in the best interests of IP Group and IP Group Shareholders as a whole and intend to recommend unanimously that IP Group Shareholders vote in favour of all of the resolutions to be proposed at the IP Group General Meeting which will be convened in connection with the Offer.

The IP Group Directors have received financial advice from Rothschild and Numis in relation to the Offer. In providing their advice to the IP Group Directors, Rothschild and Numis have relied upon the IP Group Directors' commercial assessment of the Offer.

6. Information relating to Touchstone

Touchstone creates, builds and invests in technology companies and licensing opportunities developed from scientific research from the 'Golden Triangle', the geographical region broadly bounded by London, Cambridge and Oxford.

This area has a cluster of leading academic research and technology businesses, and is home to four of the world's top 10 universities, as well as leading research institutions.

Touchstone supports scientists and entrepreneurs in the commercialisation of their ideas through protecting and licensing out intellectual property (through its Technology Transfer subsidiary, Imperial Innovations Limited), by leading the formation of new companies, by recruiting high calibre management teams and by providing investment and encouraging co-investment. Touchstone remains an active investor over the life of its portfolio companies, with the majority of Touchstone's investment going into businesses in which it is already a shareholder.

7. Information relating to IP Group

IP Group was established in 2000 to commercialise scientific innovation developed in the UK's leading research institutions.

IP Group's business model is to form, or assist in the formation of, start-up companies based on disruptive scientific and technical innovation created in those institutions, to take a significant minority equity stake in those companies and then to grow the value of that equity over time through active participation in the development of such companies. IP Group's strategy has been to build significant minority equity stakes in 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 IP Group's strategy is its ability to access a wide range of leading scientific research. This has been achieved primarily through long-term partnerships with a number of leading research universities in the UK and the US. IP Group entered into its first long term partnership with the University of Oxford's Chemistry Department in 2000 and now has direct arrangements covering thirteen of the UK's, nine of Australasia's and five of the US's leading research universities as well as three US DOE Laboratories through FedIMPACT.

IP Group has made a strategic investment in Oxford Sciences Innovation plc, which entered into a framework agreement with the University of Oxford in March 2015 under which it is the contractually preferred intellectual property partner of the University of Oxford for the provision of capital to and development of spin-out companies based on research from the University of Oxford's Medical Sciences Division and its Mathematical, Physical and Life Sciences Division. IP Group has made a strategic investment in Cambridge Innovation Capital which supports the growth of innovative businesses located in the "Cambridge Cluster". The Company and Cambridge Innovation Capital have also entered into a memorandum of understanding to share information on investment and co-investment opportunities.

The Company was admitted to AIM in October 2003 and moved to the Official List in June 2006. On and subsequent to its admission to AIM, IP Group has raised approximately £570 million of net proceeds from equity investors, predominantly to build its portfolio of spin-out companies. In March 2014, the Company completed the acquisition of Fusion IP plc, an AIM listed company with complementary arrangements with universities and research institutions.

As at 31 December 2016, IP 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.

8. Current trading

Current trading for IP Group continues in line with statements made in its announcement on 7 March 2017 and the prospectus published in connection with the Capital Raise on 23 May 2017.

9. Irrevocable undertakings and Letters of Intent

IP Group has received hard irrevocable undertakings to accept or procure acceptance of the Offer, or in the event that the Offer is implemented by way of a Scheme, vote (or procure the voting) in favour of the Scheme at the Court Meeting and the resolution(s) to be proposed at the Touchstone General Meeting, from each of Invesco Asset Management Limited ("Invesco"), Woodford Investment Management Limited ("Woodford") and Lansdowne Developed Markets Master Fund Limited ("Lansdowne"). Such Touchstone Shares that are subject to the respective irrevocable undertakings amount to, in aggregate, 48,360,413 Touchstone Shares, representing approximately 29.9995 per cent. of the ordinary share capital of Touchstone in issue.

These irrevocable undertakings will cease to be binding if, among other things: (i) IP Group announces (with the consent of the Panel, with respect to Touchstone) that it does not intend to make or proceed with the Offer and no new, revised or replacement Offer (or Scheme) is announced in accordance with Rule 2.7 of the Code; or (ii) on the date on which the Offer (or Scheme) lapses or is withdrawn no new, revised or replacement Offer (or Scheme) has been announced in accordance with Rule 2.7 of the Code. Each irrevocable undertaking remains binding in the event of a higher, or any other, bid or offer for Touchstone.

Further details of these hard irrevocable undertakings are set out at Appendix 3 to this Announcement.

The Company has also received non-binding letters of intent from Invesco, Woodford, and Lansdowne in favour of the Company amounting to, in aggregate, 71,469,280 Touchstone Shares representing approximately 44.3346 per cent of the share capital of Touchstone in issue.

Accordingly, IP Group has received irrevocable undertakings and letters of intent in support of the Offer from Touchstone Shareholders representing, in aggregate, 74.3341 per cent of Touchstone's issued share capital.

Further details of these non-binding letters of intent are set out at Appendix 3 to this Announcement.

10. Conditions and the Offer

The Offer will be subject to the Conditions and further terms and conditions referred to in Appendix 1 to this Announcement and to be set out in the Offer Document and the Form of Acceptance.

The Conditions include, amongst other things, valid acceptances having been received in respect of not less than 75 per cent. (or such lesser percentage as IP Group may decide) of the Touchstone Shares to which the Offer relates and of the voting rights attached to those Touchstone Shares. The Conditions include the receipt of antitrust approval from the CMA and other regulatory consents as further described in Part A of Appendix 1 to this Announcement.

11. Squeeze-out, delisting, cancellation of trading and re-registration

If IP Group receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Touchstone Shares by nominal value and voting rights attaching to such Touchstone Shares to which the Offer relates, IP Group intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to squeeze‑out the remaining Touchstone Shares in respect of which the Offer has not been accepted.

After the Offer becomes or is declared unconditional in all respects and IP Group has by virtue of its shareholdings and acceptances of its Offer acquired, or agreed to acquire, issued share capital carrying at least 75 per cent. of the voting rights of Touchstone, IP Group intends to procure the making of an application by Touchstone for cancellation of the trading in Touchstone Shares on AIM. A notice period of not less than 20 Business Days prior to the cancellation will commence on the date on which IP Group has obtained 75 per cent. or more of the voting rights of Touchstone. Delisting would significantly reduce the liquidity and marketability of any Touchstone Shares not assented to the Offer.

It is also proposed that, following the Offer becoming unconditional in all respects and after the Touchstone Shares are delisted, Touchstone will be re‑registered as a private company under the relevant provisions of the Companies Act.

12. IP Group Shareholder approval and Circular

As a result of the size of the transaction, the Offer constitutes a Class 1 transaction for IP Group for the purposes of the Listing Rules. Accordingly, IP Group will be required to seek the approval of IP Group Shareholders for the Offer at the IP Group General Meeting.

IP Group will prepare and send to IP Group Shareholders the Circular summarising the background to and reasons for the Offer which will include a notice convening the IP Group General Meeting. The Offer is conditional on, among other things, the IP Group Resolutions being passed by the requisite majority of IP Group Shareholders at the IP Group General Meeting (but not, for the avoidance of doubt, any other resolutions to be proposed at the IP Group General Meeting which shall not be conditions to the Offer).

It is expected that the Circular will be posted to IP Group Shareholders at the same time as the Offer Document is posted to Touchstone Shareholders, expected to be in July 2017.

13. Admission of New IP Group Shares

Application will be made to the UK Listing Authority and the London Stock Exchange for the New IP Group Shares to be admitted to the Official List and to trading on the London Stock Exchange's main market for listed securities respectively. It is expected that Admission will become effective and that dealings for normal settlement in the New IP Group Shares will commence on the London Stock Exchange at 8.00 a.m. on the first Business Day following the date on which the Offer becomes or is declared unconditional in all respects.

14. Share Schemes

Participants in the Touchstone Share Schemes will be contacted regarding the effect of the Offer on their rights under these schemes and provided with further details concerning the proposals which will be made to them in due course. Details of the proposals will be set out in the Offer Document or, as the case may be, the Scheme Document and in separate letters to be sent to participants in the share schemes.

15. Confidentiality Agreement

IP Group and Touchstone have entered into a mutual non-disclosure agreement dated 20 April 2017 pursuant to which each of IP Group and Touchstone has undertaken, among other things, to keep certain information relating to the Offer and the other party confidential and not to disclose it to third parties (other than to permitted parties) subject to certain usual exceptions.

16. Disclosure of Interests

As at the close of business on 19 June 2017, being the last Business Day prior to the date of this Announcement, save for (i) the disclosures in the IP Group Opening Position Disclosure and (ii) the irrevocable undertaking referred to in Appendix 3 to this Announcement, none of IP Group or any of its directors nor, so far as IP Group is aware, any person acting, or deemed to be acting, in concert with IP Group:

a) had any interest in, or right to subscribe for, relevant securities of Touchstone;

b) had any short positions in (whether conditional or absolute and whether in the money or otherwise), including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery of, any relevant securities of Touchstone;

c) was a party to any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the City Code in relation to relevant securities of Touchstone; or

d) had borrowed or lent, or entered into any financial collateral arrangement or dealing arrangements in respect of, any relevant securities of Touchstone.

17. Documents available for inspection

Copies of the following documents will, by no later than 12 noon on 21 June 2017, be published on the investor relations section of IP Group's website at www.ipgroupplc.com/investor-relations/:

a) this Announcement;

b) the irrevocable undertakings and letters of intent listed in Appendix 3 to this Announcement; and

c) the Confidentiality Agreement.

18. General

IP Group reserves the right to elect to implement the Offer by way of a Scheme as an alternative to the Offer, subject to the Panel's consent.

Further Information

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

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

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

Information Relating to Touchstone Shareholders

Overseas Jurisdictions

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

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

Important Notices Relating to Financial Advisers

Rothschild, which is authorised and regulated by the FCA in the UK, is acting exclusively for

IP Group and no one else in connection with the Offer and will not be responsible to anyone

other than IP Group for providing the protections afforded to clients of Rothschild or for providing

advice in relation to the Offer or any other matters referred to in this Announcement.

Cautionary Note Regarding Forward-Looking Statements

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

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

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

Rounding

No Profit Forecasts or Estimates

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

Dealing and Opening Position Disclosure Requirements

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

Publication on website and availability of hard copies

APPENDIX 1

CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE OFFER

The Offer will be subject to the applicable requirements of the City Code, the Panel, the London Stock Exchange and the FCA. The Offer will be governed by English law and will be subject to the exclusive jurisdiction of the English courts. In addition, the Offer will be subject to the terms and conditions set out below and to be set out in the Offer Document and the Form of Acceptance.

Each Condition shall be regarded as a separate Condition (as the case may be) and shall not be limited by reference to any other Condition.

Part A: Conditions of the Offer

Acceptances

(A) The Offer will be conditional upon valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. on the First Closing Date (or such later time(s) and/or date(s) as IP Group may, in accordance with the City Code or with the consent of the Panel, decide) in respect of not less than 75 per cent. (or such lesser percentage as IP Group may decide) of the Touchstone Shares to which the Offer relates and of the voting rights attached to those Touchstone Shares, provided that this Condition will not be satisfied unless IP Group and/or any of the IP Group Companies shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise), directly or indirectly, Touchstone Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Touchstone, including for this purpose (except to the extent otherwise agreed by the Panel) any such voting rights attaching to Touchstone Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise.

For the purposes of this Condition:

(i) Touchstone Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon being entered into the register of members of Touchstone;

(ii) all percentages of voting rights, share capital and relevant securities are to be calculated by reference to the percentage held and in issue outside treasury; and

(iii) the expression "Touchstone Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act.

IP Group Shareholder approval

(B) the passing at the IP Group General Meeting (or at any adjournment thereof) of such resolution or resolutions as are necessary to approve, implement and effect the Offer and the acquisition of any Touchstone Shares including a resolution or resolutions to authorise the allotment of New IP Group Shares pursuant to the Offer and approve the Offer in accordance with the Class 1 requirements under Listing Rule 10.5.1R (2) (as such resolutions shall be set out in the Circular in due course);

Admission to listing

(C) the UK Listing Authority having acknowledged to IP Group or its agent (and such acknowledgement not having been withdrawn) that the application for the admission of the New IP Group Shares to the premium segment of the Official List has been approved and (after satisfaction of any conditions to which such approval is expressed to be subject ("listing conditions")) will become effective as soon as a dealing notice has been issued by the FCA and any listing conditions having been satisfied;

Admission to trading

(D) the London Stock Exchange having acknowledged to IP Group or its agent (and such acknowledgement not having been withdrawn) that the New IP Group Shares will be admitted to trading on the main market of the London Stock Exchange;

CMA clearance

(E) any one of the following conditions having been fulfilled:

(i) issuance of a decision by the Competition and Markets Authority (the "CMA") that the Merger does not constitute a relevant merger situation pursuant to section 23 of the Enterprise Act 2002 (the "Enterprise Act"); or

(ii) issuance of a decision by the CMA pursuant to sections 22 or 33 of the Enterprise Act that a reference for an in-depth investigation will not be made in respect of the Merger either unconditionally or subject to conditions, obligations, undertakings or modifications in terms satisfactory to IP Group pursuant to section 73 of the Enterprise Act; or

(iii) if any of the circumstances specified in section 100(1) of the Enterprise Act applies in respect of that merger notice, issuance of a decision by the CMA pursuant to Condition (i) or (ii) above; or

(iv) expiry of the period prescribed in section 34ZA of the Enterprise Act in which the CMA may issue a decision that a reference will be made in respect of the Merger, but without such a decision having been issued, by the CMA pursuant to sections 22 or 33 of the Enterprise Act,

and in each case the CMA not having already made an order pursuant to section 72(2) of the Enterprise Act in terms that would prevent the Offer becoming unconditional.

Offer control clearance in any other jurisdiction

(F) to the extent that IP Group and Touchstone agree (such agreement to take due account of their relative legal obligations, and not to be unreasonably withheld) that any other Offer control consents or approvals are required or desirable prior to the completion of the Offer according to the law of any other jurisdiction, all relevant notifications or filings having been made, all appropriate waiting periods having expired, lapsed or been terminated and all such clearances or approvals having been granted (or being deemed to have been granted in accordance with the relevant law) and is on terms reasonably satisfactory to IP Group and Touchstone;

FCA approval

(G) in respect of IP Group, the appropriate regulator (as defined in section 178(2A) of FSMA) of each UK authorised person (as defined in section 191G of FSMA) within the Wider Touchstone Group in which IP Group intends to acquire or increase control:

(i) having given notice for the purposes of section 189(4)(a) of FSMA that it has determined to approve such acquisition or increase in control on terms reasonably satisfactory to IP Group; or

(ii) being treated, by virtue of section 189(6) of FSMA, as having approved such acquisition of or increase in control,

where references to FSMA are read, where applicable, with the Financial Services and Markets Act 2000 (Controllers) (Exemptions) Order 2009;

General Third Party clearances

(H) other than in respect of Conditions (E) to (G) above, no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, association, institution or any other body or person whatsoever in any jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or enacted, made or proposed any statute, regulation, decision or order, or having taken any other steps which would or might reasonably be expected to:

(i) require, prevent or delay the divestiture, or materially alter the terms envisaged for any proposed divestiture by any member of the Wider IP Group or any member of the Wider Touchstone Group of all or any portion of their respective businesses, assets or property or impose any limitation on the ability of any of them to conduct their respective businesses (or any of them) or to own any of their respective assets or properties or any part thereof which, in any such case, is material in the context of the Wider IP Group or the Wider Touchstone Group, in either case taken as a whole;

(ii) require, prevent or delay the divestiture by any member of the Wider IP Group of any shares, securities or other interests in any member of the Wider Touchstone Group;

(iii) impose any material limitation on, or result in a delay in, the ability of any member of the Wider IP Group directly or indirectly to acquire or to hold or to exercise effectively, directly or indirectly, any rights of ownership in respect of shares or loans or securities convertible into shares or any other securities (or the equivalent) in any member of the Wider Touchstone Group or the Wider IP Group or to exercise management control over any such member;

(iv) otherwise adversely affect the business, assets, profits or prospects of any member of the Wider IP Group or of any member of the Wider Touchstone Group to an extent which is material in the context of the Wider IP Group or the Wider Touchstone Group, in either case taken as a whole;

(v) make the Offer or its implementation or the acquisition or proposed acquisition by IP Group or any member of the Wider IP Group of any shares or other securities in, or control of Touchstone or any member of the Wider Touchstone Group void, illegal, and/or unenforceable under the laws of any jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, delay or otherwise interfere with the same, or impose additional conditions or obligations with respect thereto, or otherwise challenge or interfere therewith;

(vi) require any member of the Wider IP Group or the Wider Touchstone Group to offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Touchstone Group or the Wider IP Group owned by any third party;

(vii) impose any limitation on, or result in any delay of, the ability of any member of the Wider Touchstone Group or the Wider IP Group to integrate or co-ordinate its business, or any part of it, with the businesses of any other member of the Wider Touchstone Group or the Wider IP Group which is adverse to and material in the context of the Wider Touchstone Group or the Wider IP Group, in each case taken as a whole or in the context of the Offer; or

(viii) result in any member of the Wider Touchstone Group or the Wider IP Group ceasing to be able to carry on business under any name under which it presently does so, and all applicable waiting and other time periods during which any such Third Party could institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any Touchstone Shares having expired, lapsed or been terminated;

Requisite filings, etc.

(I) other than in relation to the competition law and regulatory approvals referred to in (E) to (G) above, all necessary filings or applications having been made in connection with the Offer and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the Wider IP Group of any shares or other securities in, or control of, Touchstone and the Touchstone Group and all authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals reasonably deemed necessary or appropriate by IP Group or any member of the Wider IP Group for or in respect of the Offer or the proposed acquisition of any shares or other securities in, or control of, Touchstone by any member of the Wider IP Group having been obtained in terms and in a form reasonably satisfactory to IP Group from all appropriate Third Parties or persons with whom any member of the Wider Touchstone Group has entered into contractual arrangements and all such authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals together with all material authorisations, orders, recognitions, grants, licences, confirmations, clearances, permissions and approvals necessary or appropriate to carry on the business of any member of the Wider Touchstone Group which is material in the context of the operations of the IP Group Companies or the Touchstone Group as a whole remaining in full force and effect and all filings necessary for such purpose have been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Offer becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

Certain matters arising as a result of any arrangement, agreement etc.

(J) save as Disclosed, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Touchstone Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Offer or the proposed acquisition of any shares or other securities in Touchstone or because of a change in the control or management of Touchstone or otherwise, could or might result in (in each case to an extent which is material and adverse in the context of the Wider Touchstone Group as a whole, or in the context of the Offer):

(i) any moneys borrowed by or any other indebtedness (actual or contingent) of, or grant available to any such member, being or becoming repayable or capable of being declared repayable immediately or earlier than their or its stated maturity date or repayment date or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

(ii) any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests of any such member thereunder being terminated or adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

(iii) any assets or interests of any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged;

(iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any such member;

(v) the rights, liabilities, obligations or interests of any such member in, or the business of any such member with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated, adversely modified or adversely affected;

(vi) the value of any such member or its financial or trading position or prospects being prejudiced or adversely affected;

(vii) any such member ceasing to be able to carry on business under any name under which it presently does so; or

(viii) the creation of any liability, actual or contingent, by any such member, and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Touchstone Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could result in any of the events or;

circumstances as are referred to in sub-paragraphs (i) to (viii) of this Condition (in each case to the extent which is material in the context of the Wider Touchstone Group taken as a whole);

Certain events occurring since 31 March 2017

(K) save as Disclosed, no member of the Wider Touchstone Group having, since 31 March 2017:

(i) save as between Touchstone and wholly-owned subsidiaries of Touchstone or for Touchstone Shares issued pursuant to the exercise of options or vesting of awards granted under the Share Schemes, issued, authorised or proposed the issue of additional Touchstone Shares of any class;

(ii) save as between Touchstone and wholly-owned subsidiaries of Touchstone, or for the grant of options or awards under the Touchstone Share Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible into Touchstone Shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(iii) other than to another member of the Touchstone Group or as provided for in this Announcement recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;

(iv) save for intra-Touchstone Group transactions, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any Offer, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case, (i) other than in the ordinary course of business and (ii) which is material in the context of the Wider Touchstone Group taken as a whole;

(v) save for intra-Touchstone Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital in each case, to the extent which is material in the context of the Wider Touchstone Group taken as a whole;

(vi) issued, authorised or proposed the issue of any debentures or (save for intra-Touchstone Group transactions), save in the ordinary course of business, incurred or increased any indebtedness or become subject to any guarantee or contingent liability;

(vii) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital, in each case, to the extent which is material in the context of the Wider Touchstone Group taken as a whole;

(viii) other than pursuant to the Offer (and except for transactions between Touchstone and its wholly-owned subsidiaries or between wholly-owned subsidiaries of Touchstone which are not material in the context of the Wider Touchstone Group) implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement;

(ix) entered into or changed the terms of any contract with any director or senior executive;

(x) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or could be restrictive on the businesses of any member of the Wider Touchstone Group or the Wider IP Group or which involves or could involve an obligation of such a nature or magnitude other than in the ordinary course of business and which is material or would reasonably likely to be material in the context of the Wider Touchstone Group taken as a whole;

(xi) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or had any such person appointed, and in each such case, to the extent which is material in the context of the Wider Touchstone Group taken as a whole;

(xii) entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider Touchstone Group other than to a nature and extent which is normal in the context of the business concerned, and in each such case which is material or would reasonably likely to be material in the context of the Wider Touchstone Group taken as a whole;

(xiii) waived or compromised any claim otherwise than in the ordinary course of business and in any case which is material or would reasonably likely to be material in the context of the Wider Touchstone Group taken as a whole;

(xiv) entered into any contract, commitment, arrangement or agreement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition;

(xv) having made or agreed or consented to any change to:

(1) the terms of the trust deeds constituting the pension scheme(s) established by any member of the Wider Touchstone Group for its directors, employees or their dependents;

(2) the contributions payable to any such scheme(s) or to the benefits which accrue or to the pensions which are payable thereunder;

(3) the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or

(4) the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued or made, in each case, to the extent which is material in the context of the Wider Touchstone Group taken as a whole;

(xvi) proposed, agreed to provide or modified the terms of the Touchstone Share Schemes or any share option scheme, incentive scheme or other benefit constituting a material change relating to the employment or termination of employment of a material category of persons employed by the Wider Touchstone Group or which constitutes a material change to the terms or conditions of employment of any senior employee of the Wider Touchstone Group, save as agreed by the Panel (if required) and by IP Group; or

(xvii) having taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Touchstone Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the City Code.

No adverse change, litigation or regulatory enquiry

(L) save as Disclosed, since 31 March 2017:

(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Touchstone Group which, in any such case, is material in the context of the Wider Touchstone Group taken as a whole and no circumstances have arisen which would or might reasonably be expected to result in any such adverse change;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Touchstone Group is or may become a party (whether as a plaintiff, defendant or otherwise) and no investigation by any Third Party against or in respect of any member of the Wider Touchstone Group having been instituted announced or threatened by or against or remaining outstanding in respect of any member of the Wider Touchstone Group which in any such case, has had or might reasonably be expected to have an adverse effect that is material in the context of the Wider Touchstone Group; and

(iii) no contingent or other liability having arisen or become apparent to IP Group (other than in the ordinary course of business) which will or might be likely to adversely affect the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider Touchstone Group to an extent which is material in the context of the Wider Touchstone Group taken as a whole;

No withdrawal, cancellation, termination or modification of licence

(M) save as Disclosed, no steps having been taken which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Touchstone Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which is material and has had, or might reasonably be expected to have, a material adverse effect on the Wider Touchstone Group taken as a whole;

No discovery of certain matters

(N) save as Disclosed, IP Group not having discovered:

(i) that any financial, business or other information concerning the Wider Touchstone Group as contained in the information publicly disclosed at any time by or on behalf of any member of the Wider Touchstone Group is materially misleading, contains a material misrepresentation of fact or omits to state a fact necessary to make that information not misleading;

(ii) that any member of the Wider Touchstone Group is subject to any liability (contingent or otherwise); or

(iii) any information which affects the import of any information disclosed at any time prior to this Announcement by or on behalf of any member of the Wider Touchstone Group to any member of the Wider IP Group, in each case, to the extent which is material in the context of the Wider Touchstone Group taken as a whole;

Anti-corruption, sanctions and criminal property

(O) save as Disclosed, IP Group not having discovered that:

(i) (a) any past or present member, director, officer or employee of the Wider Touchstone Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation; or (b) any person that performs or has performed services for or on behalf of the Wider Touchstone Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation; or

(ii) any material asset of any member of the Wider Touchstone Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002; or

(iii) any past or present member, director, officer or employee of the Touchstone Group has engaged in any business with, made any investments in, made any funds or assets available to or received any funds or assets from: (a) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Treasury & Customs; or (b) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states, in each case to an extent which is material in the context of the Wider Touchstone Group taken as a whole; or

(iv) no member of the Touchstone Group being engaged in any transaction which would cause IP Group to be in breach of any law or regulation upon its acquisition of Touchstone, including the economic sanctions of the United States Office of Foreign Assets Control, or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.

Intellectual Property

(P) no circumstance having arisen or event having occurred in relation to any intellectual property owned or used by any member of the Wider Touchstone Group which would have a material adverse effect on the Wider Touchstone Group taken as a whole or is otherwise material in the context of the Offer, including:

(i) any member of the Wider Touchstone Group losing its title to any intellectual property, or any intellectual property owned by the Wider Touchstone Group being revoked, cancelled or declared invalid;

(ii) any claim being asserted in writing or threatened in writing by any person challenging the ownership of any member of the Wider Touchstone Group to, or the validity or effectiveness of, any of its intellectual property; or

(iii) any agreement regarding the use of any intellectual property licensed to or by any member of the Wider Touchstone Group being terminated or varied.

Part B: Waiver and Invocation of the Conditions

Subject to the requirements of the Panel in accordance with the City Code IP Group reserves the right to waive, in whole or in part, all or any of the Conditions above, except for those Conditions (A)-(D) which cannot be waived.

Part C: Implementation by way of Scheme

IP Group reserves the right to elect to implement the Offer by way of a Scheme as an alternative to the Offer, subject to the Panel's consent.

Part D: Certain further terms of the Offer

If IP Group is required by the Panel to make an offer for Touchstone Shares under the provisions of Rule 9 of the City Code, IP Group may make such alterations to any of the above Conditions as are necessary to comply with the provisions of that Rule.

Fractions of New IP Group Shares will not be allotted or issued to persons accepting the Offer. Fractional entitlements to New IP Group Shares will be aggregated and sold in the market and the net proceeds of sale distributed pro rata to persons entitled thereto. However, individual entitlements to amounts of less than 289 pence will not be paid to persons accepting the Offer but will be retained for the benefit of IP Group.

The New IP Group Shares will be issued credited as fully paid and will rank pari passu in all respects with the existing IP Group Shares. Applications will be made to the UK Listing Authority for the New IP Group Shares to be admitted to the Official List with a premium listing and to the London Stock Exchange for the New IP Group Shares to be admitted to trading.

The New IP Group Shares to be issued pursuant to the Offer have not been and will not be registered under the United States Securities Act of 1933 (as amended) nor under any of the relevant securities laws of any Restricted Jurisdiction. Accordingly, the New IP Group Shares may not be offered, sold or delivered, directly or indirectly, into any Restricted Jurisdiction, except pursuant to exemptions from applicable requirements of any such jurisdiction.

Touchstone Shares which will be acquired under the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement.

If any dividend or other distribution is announced, declared, made, paid or becomes payable by Touchstone in respect of the Touchstone Shares on or after the date of this Announcement and before the Completion Date, IP Group reserves the right to reduce the offer consideration payable for each Touchstone Share by the amount of such dividend or other distribution by adjusting the Exchange Ratio.

The availability of the Offer to Touchstone Shareholders who are not resident in the UK or who are subject to the laws and/or regulations of another jurisdiction (including the ability of such Touchstone Shareholders to accept the Offer and/or to execute and deliver a Form of Acceptance) may be restricted by the laws and/or regulations of those jurisdictions. Persons who are not resident in the UK or who are subject to the laws and/or regulations of any jurisdiction other than the UK should inform themselves about, and observe, any applicable legal or regulatory requirements. Touchstone Shareholders who are in doubt about such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

The Offer shall lapse if, before 1:00 p.m. on the First Closing Date or the date when the Offer becomes or is declared unconditional as to acceptances, whichever is later, the Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference.

APPENDIX 2

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement:

1. Unless otherwise stated, financial information relating to IP Group has been extracted or derived (without any adjustment) from the audited annual report and accounts of IP Group for the financial year ended 31 December 2016.

2. The value of the Offer is calculated:

· by reference to the price of 134 pence per IP Group Share, being the Closing Price on 19 June 2017, the last Business Day prior to this Announcement; and

· the Exchange Ratio of 2.1575 New IP Group Shares in exchange for each Touchstone Share; and

· on the basis of the existing number of Touchstone Shares in issue referred to in paragraph 4 below.

3. References to the existing issued share capital of IP Group are to the number of IP Group Shares in issue as at 19 June 2017, being the last Business Day prior to the date of this announcement, which was 696,727,321 IP Group Shares. The international securities identification number for the IP Group Shares is GB00B128J450.

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

APPENDIX 3

DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT

Name of Touchstone shareholder	Number of Touchstone Shares over which undertaking is given	Percentage of Touchstone issued share capital as at 31 January 2017
Woodford Investment Management Ltd	16,120,413	10.0000
Invesco Asset Management Ltd	16,120,000	9.9997
Lansdowne Developed Markets Master Fund Limited	16,120,000	9.9997
Total	48,360,413	29.9995

Name of Touchstone shareholder	Number of Touchstone Shares over which letter of intent is given	Percentage of Touchstone issued share capital as at 31 January 2017
Woodford Investment Management Ltd	20,636,738	12.8016
Invesco Asset Management Ltd	46,750,000	29.0005
Lansdowne Developed Markets Master Fund Limited	4,082,542	2.5325
Total	71,469,280	44.3346

APPENDIX 4

DEFINITIONS

"Admission" means admission of the New IP Group Shares to the premium segment of the Official List and to trading on the Main Market of the London Stock Exchange.

"Announcement" means this announcement made pursuant to Rule 2.7 of the City Code.

"associated undertaking" shall be construed in accordance with paragraph 19 of Schedule 6 to The Large and Medium-sized Company and Groups (Accounts and Reports) Regulations 2008 (SI 2008/410) but for this purpose ignoring paragraph 19 (1) (b) of Schedule 6 to these regulations.

"Board" means the board of directors of IP Group.

"Business Day" means a day, (other than a Saturday, Sunday, public or bank holiday) on which banks are generally open for business in London.

"Capital Raise" means the £207 million capital raise announced by IP Group on 23 May 2017.

"Circular" means the circular to be sent by IP Group to IP Group Shareholders summarising the background to the reasons for the Offer, which will include a notice convening the IP Group General Meeting.

"City Code" means the City Code on Takeovers and Mergers.

"Closing Price" means, on any particular day, the price at which the last trade was made, as derived from the daily official list of the London Stock Exchange on that day.

"CMA" means the UK Competition and Markets Authority.

"CMA Phase 2 Reference" means a reference of the Offer to the chair of the CMA for the constitution of a group under Schedule 4 to the UK Enterprise and Regulatory Reform Act 2013.

"Companies Act" means Companies Act 2006 (as amended).

"Combined Group" means the enlarged group following completion of the Offer comprising the IP Group Companies and the Touchstone Group.

"Completion" or "Completion Date" means the date on which the Offer becomes or is declared unconditional in all respects or, if IP Group elects to implement the Offer by way of Scheme, the date on which the Scheme becomes effective in accordance with its terms.

"Conditions" means the conditions to the implementation of the Offer set out in Appendix 1 to this Announcement and to be set out in the Offer Document.

"Confidentiality Agreement" means the non-disclosure agreement dated 20^th April 2017 entered into between Touchstone and IP Group.

"Court" means the High Court of Justice in England and Wales.

"Court Meeting" means, if IP Group elects to implement the Offer by way of Scheme, any meeting(s) of the Touchstone Shareholders convened by order of the Court pursuant to section 896 of the Companies Act for the purpose of considering and, if thought fit, approving the Scheme (with or without amendment) and any adjournment, postponement or reconvention thereof.

"Day 45" means the date 45 days from posting of the Offer Document.

"Dealing Disclosure" means an announcement pursuant to Rule 8 of the City Code containing details of dealings in relevant securities of a party to an offer.

"Disclosed" means the information fairly disclosed by, or on behalf of Touchstone: (i) in the Annual Report and Accounts of the Touchstone Group for the financial year ended 31 July 2016; (ii) in this Announcement; (iii) in any other public announcement made by Touchstone in accordance with the Market Abuse Regulation, the Listing Rules and the Disclosure Guidance and Transparency Rules prior to this Announcement; or (iv) as disclosed in writing prior to the date of this Announcement by or on behalf of Touchstone to IP Group (or its respective officers, employees, agents or advisers in their capacity as such).

"Disclosure Guidance and Transparency Rules" means the Disclosure Guidance and Transparency Rules of the FCA in its capacity as the UK Listing Authority under FSMA and contained in the UK Listing Authority's publication of the same name.

"EU" or "European Union" means an economic and political union of 28 member states which are located primarily in Europe.

"Exchange Ratio" means the exchange ratio of 2.1575 New IP Group Shares in exchange for each Touchstone Share as it may be adjusted as set out in the Offer Document.

"FCA" means the Financial Conduct Authority.

"First Closing Date" means the first closing date of the Offer, to be set out in the Offer Document.

"Form of Acceptance" means the form of acceptance and authority relating to the Offer which shall accompany the Offer Document for use by Touchstone Shareholders with Touchstone Shares in certificated form in connection with the Offer;

"FSMA" means the Financial Services and Markets Act 2000 (as amended).

"IP Group" means IP Group plc, incorporated in England and Wales with registered number 04204490.

"IP Group Directors" means the directors of IP Group as at the date of this Announcement or, where the context so requires, the directors of IP Group from time to time.

"IP Group General Meeting" means the general meeting of IP Group Shareholders to be convened to consider and, if thought fit, approve the IP Group Resolutions, including any adjournment thereof.

"IP Group Companies" means IP Group, its subsidiaries and its subsidiary undertakings from time to time.

"IP Group Opening Position Disclosure" means the Opening Position Disclosure made by IP Group on 12 June 2017;

"IP Group Resolutions" means the ordinary shareholder resolutions of IP Group to approve, effect and implement the Offer and to grant authority to the IP Group Directors to allot the New IP Group Shares.

"IP Group Shareholders" means holders of IP Group Shares.

"IP Group Shares" means the ordinary shares of 2 pence each in the capital of IP Group.

"Listing Rules" means the rules and regulations made by the UK Listing Authority under

Part VI of FSMA and contained in the UK Listing Authority's publication of the same name (as amended from time to time).

"London Stock Exchange" means London Stock Exchange plc.

"Market Abuse Regulation" means The Market Abuse Regulation (2014/596/EU).

"New IP Group Shares" means the new IP Group Shares to be issued pursuant to the Offer.

"Offer" means the offer proposed to be made by IP Group to Touchstone Shareholders to acquire the entire issued and to be issued share capital of Touchstone on the terms and subject to the Conditions set out in this Announcement and to be set out in the Offer Document and the Form of Acceptance including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer.

"Offer Document" means should the Offer be implemented by means of the Offer, the document to implement the Offer, which shall include a prospectus relating to IP Group in respect of the offer of New IP Group Shares and which will contain, inter alia, the full terms and conditions of the Offer.

"Offer Period" means the period which commenced on 23 May 2017 and ending on whichever of the following dates shall be the latest: (i) 1.00 p.m. on the First Closing Date; (ii) the date on which the Offer lapses or is withdrawn; and (iii) the date on which the Offer becomes or is declared unconditional as to acceptances.

"Official List" means the official list maintained by the UK Listing Authority.

"Opening Position Disclosure" means an announcement containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to the offer

if the person concerned has such a position.

"Panel" means the Panel on Takeovers and Mergers.

"Restricted Jurisdiction" means any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Offer is sent or made available to Touchstone Shareholders in that jurisdiction.

"Rothschild" N M Rothschild & Sons Limited, New Court St Swithin's Lane, London, EC4N 8AL

"Scheme" means, if IP Group so elects, a scheme of arrangement under Part 26 of the Companies Act between Touchstone and Touchstone Shareholders to implement the Offer with or subject to any modification, addition or condition approved or imposed by the Court.

"Scheme Document" means, if IP Group so elects to implement the Offer by way of Scheme, the document to be dispatched to Touchstone Shareholders including the particulars required by section 897 of the Companies Act.

"Significant Interest" means in relation to an undertaking, a direct or indirect interest of 20 per

cent. or more of (1) the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking or (2) the relevant partnership interest.

"subsidiary, subsidiary undertakings and undertakings" shall be construed in accordance with the Companies Act.

"Third Party" has the meaning given to it in Condition (H) in Part A of Appendix 1.

"Touchstone" means Touchstone Innovations plc, incorporated in England and Wales with registered number 05796766.

"Touchstone Board" means the board of directors of Touchstone.

"Touchstone Directors" means the directors of Touchstone as at the date of this Announcement or, where the context so requires, the directors of Touchstone from time to time.

"Touchstone General Meeting" means, if IP Group so elects to implement the Offer by way of Scheme, the general meeting of Touchstone Shareholders to be convened to consider and if thought fit pass, inter alia, a special resolution in relation to the Scheme and the Offer.

"Touchstone Group" means Touchstone and its subsidiaries and its subsidiary undertakings from time to time.

"Touchstone Shareholders" means the holders of Touchstone Shares.

"Touchstone Share Schemes" means Touchstone's Long-term Incentive Plan (24 May 2006), the Imperial Innovations SAYE Share Option Scheme and any predecessor plan previously adopted by Touchstone, each as amended from time to time.

"Touchstone Shares" means the ordinary shares of 3 1⁄33 pence each in the capital of Touchstone.

"UK" or "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

"UK Listing Authority" means the FCA as the authority for listing in the United Kingdom.

"US" or "United States" means the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia.

"Wider IP Group" means IP Group and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which IP Group and all such undertakings (aggregating their interests) have a Significant Interest (other than any member of the Wider Touchstone Group).

"Wider Touchstone Group" means Touchstone and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which Touchstone and all such undertakings (aggregating their interests) have a Significant Interest (other than any member of the Wider IP Group).

All times referred to are London time unless otherwise stated.

All references to "pence" or "£" are to the lawful currency of the United Kingdom.

All references to statutory provision or law or to any order or regulation shall be construed as a reference to that provision, law, order or regulation as extended, modified, replaced or re-enacted from time to time and all statutory instruments, regulations and orders from time to time made thereunder or deriving validity therefrom.

This information is provided by RNS

The company news service from the London Stock Exchange

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