IP Group rejects Railpen takeover approach valuing company at £613.1 million
IP Group turns down a takeover proposal from its largest shareholder Railpen, arguing the offer does not reflect the value of its portfolio. The approach values the early-stage science investor at about £613.1 million, with the board saying the terms sit well below its net asset value.
Highlights
- IP Group's board unanimously rejected Railpen's final takeover proposal valuing the company at £613.1 million, citing a material undervaluation.
- Railpen's offer, including 59 pence per share cash, a stake in Oxford Nanopore, and up to 5 pence per share contingent value, represented a 6.7% premium to IP Group's last close.
- The proposal valued IP Group at a 37.2% discount to its 110.4 pence per share net asset value as of December 31, 2025, underscoring the valuation gap for UK early-stage science investors.
Offer terms and board response
As reported by Reuters, IP Group says it unanimously rejects Railpen's final proposal after three earlier approaches from the London-based investor. The company says the bid materially undervalues the business and its holdings.Railpen, which manages more than £34 billion in assets for railway pension schemes, holds an 18.38% stake in IP Group, according to LSEG data. Its final proposal includes 59 pence per share in cash, a distribution of IP Group's Oxford Nanopore stake, and a contingent value right of up to 5 pence per share linked to a potential sale of IP Group's Istesso holding.
IP Group says that, excluding the contingent element, the proposal implies a value of about 69.4 pence per share. That represents a 6.7% premium to the company's last closing price.
Valuation gap and market implications
IP Group argues the offer remains well below the underlying value of the company despite the premium to the market price. It says the proposal stands at a 37.2% discount to its net asset value of 110.4 pence per share as of December 31, 2025.The rejection highlights the gap between listed market valuations and portfolio valuations for early-stage science investors in the UK. It also leaves Railpen, already IP Group's largest shareholder, to decide whether to improve its terms or remain an influential investor without a deal.
In our earlier article on CPP Investment Board’s stake reduction in Unite Group, we covered how the holding fell below 10%, removing CPPIB’s right to appoint a board representative and prompting the immediate resignation of its nominated non-executive director. We also noted that the shift changed the balance among Unite’s top shareholders as the company weighs portfolio moves, highlighting how ownership levels can directly affect governance influence and strategic flexibility.
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