Touchstone takeover backed by Imperial College

Imperial College today backed the controversial £490 million takeover of the company which spawned from its labs.

The London university submitted a non-binding letter of intent to IP Group, supporting its improved all-share takeover offer for Touchstone Innovations, the rival science commercialisation business.

Touchstone, which turns lab ideas from Imperial, Cambridge and Oxford universities into fully fledged businesses, refused to enter talks with IP about an offer, arguing it “fundamentally” undervalues the company”.

IP upped its offer today, valuing Touchstone at £490 million and Imperial’s 15% stake at £75 million, enough to win over Touchstone’s founding shareholder.

“We are supportive of the strategic rationale of this transaction and appreciate the increased value for Touchstone’s shareholders implied by the new exchange ratio,” Imperial’s endowment board said.

It thanked Invesco, Woodford and Lansdowne, three of the largest mutual shareholders which have pushed for a merger, for their “long-standing support”.

The offer now has support from investors with almost 90% of Touchstone’s shares.