Recommended Offer for Fusion IP Plc

RNS Number : 3333Y

IP Group PLC

23 January 2014

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

23 January 2014

RECOMMENDED OFFER

for

FUSION IP PLC

IP GROUP PLC

to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006

Summary

The boards of IP Group plc ("IP Group") and Fusion IP plc ("Fusion IP") are pleased to announce that they have reached agreement on the terms of a unanimously recommended all-share offer to be made by IP Group for the entire issued and to be issued share capital of Fusion IP not already owned by IP Group (the "Offer"). It is proposed to effect the Offer by way of a scheme of arrangement under Part 26 of the Companies Act. IP Group currently owns 20.1 per cent. of the issued share capital of Fusion IP.

Under the terms of the Offer, Scheme Shareholders will be entitled to receive 0.446 of a New IP Group Share for every Scheme Share held. The Offer values each Fusion IP Share at 80.2 pence and the entire issued share capital of Fusion IP at approximately £87.8 million. The Offer represents a premium of approximately 27.4 per cent. to the Closing Price of 63.0 pence per Fusion IP Share on 22 January 2014 (being the last Business Day prior to the date of this announcement).

Specifically, the IP Group Directors believe that the Offer will provide the Enlarged Group with the following key benefits:

· a stronger combined team as a result of the highly complementary skill sets and experience of Fusion IP's management, scientific evaluation and business development teams;

· a larger and more diversified portfolio as a result of the inclusion of Fusion IP's developing portfolio of assets in similar sectors to those on which the Group is currently focused; and

· greater exposure to spin-out companies from Fusion IP's four partner universities, the University of Sheffield, the University of Nottingham, Cardiff University and Swansea University, and enhanced influence in the selection process for new spin-out companies from such universities going forward.

The Scheme Document containing further information about the Offer and notices of the Court Meeting and the General Meeting will be posted to Fusion IP Shareholders as soon as practicable and, unless the Panel consents otherwise, within 28 days of the date of this announcement.

IP Group also announced today that it intends to raise gross proceeds of up to approximately £75.0 million (approximately £72.9 million net of expenses) through the issue of up to 45,454,856 IP Group Shares by way of an underwritten Firm Placing and non-underwritten Placing, Open Offer and Offer for Subscription at a price of 165 pence per IP Group Share. The Offer is not conditional on the completion of the Capital Raising and the Capital Raising is not conditional on the completion of the Offer.

Commenting on the Offer, Alan Aubrey, Chief Executive Officer of IP Group said:

"Since acquiring an initial stake in Fusion IP in 2009, we have enjoyed an excellent relationship with the team and are delighted to have reached agreement to acquire Fusion IP in full. The Acquisition is highly complementary to IP Group's core business and will give the combined entity greater breadth of coverage, enabling us to access a wider pool of intellectual property as well as improve our service offering to existing and potential research institutions both in the UK and internationally. Both IP Group and Fusion IP have developed strong track records of building outstanding businesses based on intellectual property and we firmly believe that this transaction will enhance value for the shareholders of both organisations."

Commenting on the Offer, David Baynes, Chief Executive Officer of Fusion IP said:

"It is well recognised that IP Group has done a fantastic job in developing an innovative approach in the commercialisation of intellectual property as an asset class and we have very much enjoyed working with them since they first invested in Fusion IP in 2009. By becoming part of an enlarged group, I believe we will be able to better maximise the value of our growing portfolio and bring even more value to our university partners and shareholders and to the spin-out companies to whom we provide our capital and expertise. We very much look forward to it."

Unless otherwise defined, all capitalised terms shall have the meaning ascribed to them in Appendix IV (Definitions) to this announcement.

Enquiries:

IP Group plc	+44 (0) 20 7444 0050
Alan Aubrey, Chief Executive Officer
Greg Smith, Chief Financial Officer Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0062 / +44 (0) 7979 853 802 liz.vadams@ipgroupplc.com
Numis Securities Limited (Financial Adviser to IP Group)	+44 (0) 20 7260 1000
Etienne Bottari / Michael Meade / Freddie Barnfield (Corporate Finance) James Black (Corporate Broking)
FTI Consulting (IP Group's PR Adviser)	+44 (0) 20 7831 3113
Ben Atwell John Dineen

Fusion IP plc	+44 (0) 114 275 5555
David Baynes, CEO Stuart Gall, Press Relations

Cenkos Securities plc (Financial Adviser to Fusion IP)	+44 (0) 20 7397 8900
Bobbie Hilliam Harry Pardoe (Corporate Finance)

Allerton Communications (Fusion IP's PR Adviser)	+44 (0) 20 3137 2500
Peter Curtain

This summary should be read in conjunction with the full text of this announcement including the appendices to this announcement. The Offer will be subject to the Conditions and further terms set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II (Sources and Bases) to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III (Irrevocable Undertakings) to this announcement contains a summary of the irrevocable undertakings currently received in connection with the Offer, and Appendix IV (Definitions) to this announcement contains definitions of certain expressions used in this summary and in this announcement.

Please be aware that addresses, electronic addresses and certain information provided by Fusion IP Shareholders, persons with information rights and other relevant persons for the receipt of communications from Fusion IP may be provided to IP Group during the offer period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.12(c) of the Code.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of an offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme Document and the accompanying documents, including the IP Group Prospectus and the Forms of Proxy, which will together contain the full terms and conditions of the Offer, including details of how to vote in respect of the Offer. Any approval, decision or other response to the Offer should be made only on the basis of the information in the Scheme Document and the accompanying documents sent by Fusion IP to Fusion IP Shareholders.

Numis, which is authorised and regulated by the Financial Conduct Authority, is acting for IP Group and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than IP Group for providing the protections afforded to clients of Numis, or for providing advice in connection with the matters set out in this announcement or any matters referred to herein. To the fullest extent permitted by applicable law and regulation, Numis, its affiliates, directors, employees and/or agents expressly disclaim any and all liabilities relating to or resulting from the use of all or any part of this announcement or any of the information contained herein.

Cenkos, which is authorised and regulated by the Financial Conduct Authority, is acting exclusively for Fusion IP and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Fusion IP for providing the protections afforded to clients of Cenkos, or for providing advice in connection with the matters set out in this announcement or any matters referred to herein. Neither Cenkos nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos in connection with this announcement, any statement contained herein or otherwise.

Fusion IP and IP Group urge Fusion IP Shareholders to read the Scheme Document and accompanying documents, including the IP Group Prospectus and the Forms of Proxy, in full when they become available because they will contain important information relating to the Offer.

IP Group reserves the right to elect (with the consent of the Panel, where necessary) to implement the Offer by way of a Takeover Offer. In such event the Offer will be implemented on substantially the same terms, subject to appropriate amendment, as those which apply to the Scheme.

Overseas shareholders

The availability of the Offer or the release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any person who is not resident in the United Kingdom or subject to the laws of any jurisdiction other than the United Kingdom into whose possession this announcement should come should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the 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 England and Wales or if the Code had not applied. In particular, a transaction effected by means of a UK scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirement of US proxy solicitation or tender offer rules.

Unless otherwise determined by IP Group or required by the Panel and unless permitted by the applicable law and regulation, the Offer will not be made directly or indirectly in or into, or by the use of mail or any means of instrumentality (including, but not limited to, facsimile, email or other electronic transmission, telex or telephone) of inter-state or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Overseas Jurisdiction. If the Offer is implemented by way of a Takeover Offer, the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities. Unless otherwise determined by IP Group or required by the Panel and unless permitted by applicable law or regulation, 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 Overseas Jurisdiction and persons receiving this announcement and all documents (including custodians, nominees and trustees) relating to the Offer should observe these restrictions and should not mail or otherwise forward, distribute or send this announcement or documents relating to the Offer in or into or from any Restricted Overseas Jurisdiction.

IP Group may purchase Fusion IP Shares otherwise than under the Offer, either in the open market or by private negotiation. Such purchases may be made either directly or through a broker and they shall comply with the applicable laws of England and Wales, and the rules of the Financial Conduct Authority, the London Stock Exchange and the Code. Information about such purchases will be available from a Regulatory Information Service.

Notice to US Investors in Fusion IP

This announcement does not constitute, or form part of, any offer for, or any solicitation of any offer for, securities, nor is it a solicitation of any vote or approval in any jurisdiction, nor will there be any purchase or transfer of the securities referred to in this announcement in any jurisdiction in contravention of applicable laws or regulations.

The Offer relates to the shares of an English company and is proposed to be implemented by means of a scheme of arrangement provided for and governed by English law. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act or other US securities laws. Accordingly, the Offer is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement and under the Code, which differ from disclosure requirements and other requirements of US and other non-United Kingdom securities laws. If, in the future, IP Group exercises the right to implement the Offer by way of a Takeover Offer and determines to extend the Takeover Offer into the US, it will be made in accordance with the procedural and filing requirements of the US securities laws, to the extent applicable. Financial information included in the relevant documentation will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to the financial statements of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

Fusion IP is incorporated under English Law. All or some of the Fusion IP Directors are residents of countries other than the United States. As a result it may not be possible for United States Fusion IP Shareholders to effect service of process within the United States upon Fusion IP or such Fusion IP Directors or to enforce against any of them, judgments of the United States predicated upon the civil liability provisions of the federal securities laws of the United States. It may not be possible to sue Fusion IP or its officers or directors in a non-US court for violations of US securities laws.

Cautionary note regarding forward looking statements

Certain statements contained in this announcement constitute "forward looking statements". These statements relate to IP Group's, Fusion IP's or the Enlarged Group's future prospects, developments and business strategies. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or their negatives or other variations or comparable terminology. Such forward looking statements are based on current expectations and on numerous assumptions regarding the business strategies and the environment in which IP Group or the Enlarged Group will operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ very materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.

The forward looking statements speak only at the date of this announcement. IP Group and Fusion IP expressly disclaim any obligation to update such statements other than as required by law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.

No profit forecast

No statement in this announcement is intended as a profit forecast or a profit estimate, and no statement in this announcement should be interpreted to mean that (i) future earnings per Fusion IP Share (current or future financial years) will necessarily match or exceed the historical or published earnings per Fusion IP Share, or (ii) future earnings per IP Group Share (current or future financial years) will necessarily match or exceed the historical or published earnings per IP Group Share.

Disclosure requirements of the Code

Under Rule 8.3(a) of the 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 paper 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 (as defined in the Code) in which any paper 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 paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm (London time) on the tenth Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the tenth Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure (as defined in the Code).

Under Rule 8.3(b) of the 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 paper offeror must make a public Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code 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 paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by an offeror and Dealing Disclosures must also be made by the offeree company, by an offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

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. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129.

Publication on website

A copy of this announcement will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Overseas Jurisdictions on Fusion IP's website at www.fusionip.co.uk and on IP Group's website at www.ipgroupplc.com under the Investor Relations section by no later than 12 noon (London time) on the day following this announcement. For the avoidance of doubt, neither the content of the websites referred to above (nor any other website) nor the contents of any website accessible from hyperlinks on any such website is incorporated into, or forms part of, this announcement.

Neither Fusion IP nor IP Group (nor any of their respective directors, officers, employees, agents or advisers) make any representation or warranty (express or implied), or give any guarantee in this announcement as to the accuracy or completeness of the information on the websites referred to above (nor any other website) nor the contents of any website accessible from hyperlinks on any such website, nor shall they be liable for any loss or damage of any kind, direct or indirect, that any person may suffer as a result of using these websites or acting in reliance of the information on such websites. Persons who access such websites shall do so subject to the terms (if any) stated on those websites.

You may request a hard copy of this announcement (and any information incorporated by reference in it) by contacting Freddie Naylor-Leyland of Numis by email at f.naylor-leyland@numis.com or by telephone on +44 (0) 20 7260 1000 or by contacting Bobbie Hilliam of Cenkos by email at bhilliam@cenkos.com or by telephone on +44 (0) 20 7397 8900. Unless such a request is made, and save as otherwise required by Rule 2.12 of the Code, a hard copy of this announcement (and any information incorporated by reference in it) will not be sent to any person.

Rule 2.10 requirement

In accordance with Rule 2.10 of the Code, Fusion IP confirms that it has 109,437,096 ordinary shares of 1 pence each in issue, which are admitted to trading on AIM. The ISIN of the Fusion IP Shares is GB00B05L5X50. Fusion IP also has 3,675,000 warrants in issue which carry no voting rights and which are not admitted to trading or listing on any market.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

23 January 2014

RECOMMENDED OFFER

for

FUSION IP PLC

IP GROUP PLC

to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006

1. Introduction

The boards of IP Group plc ("IP Group") and Fusion IP plc ("Fusion IP") are pleased to announce that they have reached agreement on the terms of a unanimously recommended all-share offer to be made by IP Group for the entire issued and to be issued share capital of Fusion IP not already owned by IP Group (the "Offer"). It is intended that the Offer will be implemented by way of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act (the "Scheme").

2. The Offer

Under the terms of the Offer, which will be subject to the Conditions and further terms set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement and to be set out in the Scheme Document, Scheme Shareholders on the register of members of Fusion IP at the Reduction Record Time will be entitled to receive:

for each Fusion IP Share 0.446 of a New IP Group Share

and so in proportion for any other number of Scheme Shares held at the Reduction Record Time. Fractions of New IP Group Shares will not be allotted or issued pursuant to the Scheme and fractional entitlements will be rounded down to the nearest whole number of New IP Group Shares. All fractions of New IP Group Shares to which Scheme Shareholders would otherwise be entitled shall be aggregated and sold in the market as soon as reasonably practicable after the Effective Date and the net proceeds of such sale (after deduction of brokerage fees and other sale costs and expenses) shall be paid in cash to relevant Scheme Shareholders pro rata to their entitlements (subject to a de minimis amount of £5).

Application will be made for the New IP Group Shares to be admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

Based on the Closing Price per IP Group Share of 179.9 pence on 22 January 2014 (being the last Business Day prior to the date of this announcement), the Offer values each Fusion IP Share at 80.2 pence and the entire issued capital of Fusion IP at approximately £87.8 million.

The Offer represents a premium of approximately:

- 27.4 per cent. to the Closing Price of 63.0 pence per Fusion IP Share on 22 January 2014 (being the last Business Day prior to the date of this announcement);

- 22.6 per cent. to the average Closing Price of 65.5 pence per Fusion IP Share for the one month period up to and including 22 January 2014 (being the last Business Day prior to the date of this announcement); and

- 21.1 per cent. to the average Closing Price of 66.3 pence per Fusion IP Share for the six month period up to and including 22 January 2014 (being the last Business Day prior to the date of this announcement).

The Scheme requires the approval of Scheme Shareholders at the Court Meeting and the passing of the Special Resolution by Fusion IP Shareholders at the General Meeting, notices of which will be set out in the Scheme Document, as well as the sanction of the Court and confirmation of the associated Capital Reduction at the Court Hearings.

If the Scheme becomes Effective, it will be binding on all Fusion IP Shareholders irrespective of whether or not they attended, or voted in favour of, the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting. IP Group reserves the right to elect (with the consent of the Panel, where necessary) to implement the Offer by way of a Takeover Offer.

The Scheme Document setting out further details of the Scheme and the expected timetable of the Scheme and the procedures to be followed, will be dispatched to Fusion IP Shareholders as soon as reasonably practicable. It is currently expected that the Scheme will become Effective in March 2014, with settlement within 14 days of the Effective Date, in accordance with the Code.

There are no agreements or arrangements to which Fusion IP is a party which relate to the circumstances in which it may or may not seek to invoke any of the Conditions to the implementation of the Offer.

3. Fusion IP Board Recommendation

The Fusion IP Independent Directors, who have been so advised by Cenkos, consider the terms of the Offer to be fair and reasonable, and in the best interests of the Fusion IP Shareholders as a whole. In providing advice to the Fusion IP Independent Directors, Cenkos has taken into account the commercial assessments of the Fusion IP Independent Directors. Cenkos is providing the independent financial advice for the purposes of Rule 3 of the City Code.

Accordingly, the Fusion IP Independent Directors consider that the Offer is in the best interests of Fusion IP Shareholders as a whole and, accordingly, unanimously recommend that all Scheme Shareholders vote in favour of the Scheme at the Court Meeting and all Fusion IP Shareholders vote in favour of the Special Resolution at the General Meeting, as the Fusion IP Independent Directors who beneficially own or control, and can procure the voting of, Scheme Shares and Fusion IP Shares have irrevocably undertaken to do at the Court Meeting and at the General Meeting, respectively, in each case in respect of their controlled holdings of, in aggregate, 4,009,996 Fusion IP Shares, representing approximately 3.7 per cent. of the share capital of Fusion IP in issue on 22 January 2014 (being the Business Day prior to the date of this announcement). Dr. Alison Fielding has been nominated to the Fusion IP Board by IP Group and therefore is not deemed independent for the purposes of providing the recommendation to Fusion IP Shareholders pursuant to the Code.

4. Background to and reasons for the Offer

Both IP Group and Fusion IP have a reputation for building businesses based on intellectual property primarily sourced from leading scientific research institutions and both companies are also recognised as key opinion leaders in this emerging asset class. In the last quarter of 2009, IP Group acquired a strategic stake in Fusion IP and entered into a co-investment agreement with Fusion IP relating to spin-out companies originating from Fusion IP's university partners, giving IP Group partial access to the scientific innovation from these leading research universities. Since 2009, IP Group has developed a strong and successful working relationship with Fusion IP, having strategic influence through its board representative and having co-invested in a number of new and existing opportunities sourced from Fusion IP's university partners. Given this, the IP Group Board considers that the acquisition of Fusion IP at this time represents an opportunity to create a stronger UK based IP commercialisation company with greater critical mass which the IP Group Directors believe will lead to enhanced value for the shareholder base of the Enlarged Group.

Specifically, the IP Group Board believes that the full acquisition of Fusion IP will provide the Enlarged Group with the following key benefits:

· a stronger combined team as a result of the highly complementary skill sets and experience of Fusion IP's management, scientific evaluation and business development teams;

· a larger and more diversified portfolio as a result of the inclusion of Fusion IP's developing portfolio of assets in similar sectors to those on which the Group is currently focused; and

Overall, the IP Group Directors believe that the combination of the two businesses will create an entity with a greater ability to attract the best talent, to access a wide pool of investors and to access potentially world-class IP than would be possible by the two entities on a standalone basis. Furthermore, the Enlarged Group will continue to work with, and will be capable of providing an enhanced and broader offering to, leading research intensive institutions, both in the UK and internationally.

5. Background to and reasons for the Fusion IP Independent Directors' recommendation

In 2005, Fusion IP started investing in the commercialisation of university-generated intellectual property. Since it was formed, Fusion IP has established agreements with four key universities, being the University of Sheffield, Cardiff University, the University of Nottingham and Swansea University. Fusion IP currently has shareholdings in over 20 companies, including significant shareholdings in Diurnal, Phase Focus, Magnomatics, Seren, MedaPhor, FCL and Asalus.

The Fusion IP Independent Directors believe that the Fusion IP investment portfolio has now achieved a critical mass, in terms of both size and sector diversification, and that a combination with IP Group will provide Fusion IP Shareholders exposure to a wider range of spin-out companies and will present Fusion IP with further opportunities for expansion. The Fusion IP Independent Directors also believe having assessed the IP Group investment portfolio that it is highly complementary to Fusion IP's with regards to sector exposure, maturity and investment value. Further, IP Group's capacity to invest in portfolio companies following the Capital Raising puts the Enlarged Group in a prime position to take advantage of further investment opportunities within the current Fusion IP investment portfolio and university relationships.

The Fusion IP Independent Directors believe that the Offer presents a number of other benefits for Fusion IP Shareholders, including:

- attractive offer terms: the Offer represents a premium of 27.4 per cent. to the Closing Price of 63.0 pence per Fusion IP Share on 22 January 2014 (being the last Business Day prior to the date of this announcement);

- improved liquidity: pursuant to the terms of the Scheme, Fusion IP Shareholders will receive shares in a FTSE 250 company, with a liquid listing;

- diversified capital base: the Enlarged Group will have access to a broader shareholder base as well as a broader range of financing options;

- balance sheet scale: a larger combined balance sheet will allow the execution of a greater number of investments in portfolio companies;

- synergies: the Fusion IP Independent Directors' expect that a combination of IP Group and Fusion IP will lead to synergies, specifically listing costs;

- diversification: the Enlarged Group will have a wider spread of portfolio and sector companies and specifically give Fusion IP Shareholders exposure to companies with a more mature investment profile; and

- strategic partnerships: a combination of IP Group and Fusion IP will give each access to the other's university relationships and other relationships and the opportunity to further expand such relationships.

6. Irrevocable undertakings to vote in favour of the Scheme

The Fusion IP Directors who hold, or have a beneficial interest in, Fusion IP Shares have irrevocably undertaken to vote, or procure the vote of, such Fusion IP Shares amounting, in aggregate, to 4,009,996 Fusion IP Shares, representing approximately 3.7 per cent. of the issued share capital of Fusion IP as at 22 January 2014 (being the last Business Day date prior to the date of this announcement) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting (or, in the event the Offer is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer). All such undertakings shall remain binding in the event of a competing offer being made for Fusion IP, unless the Offer lapses or is withdrawn.

All Fusion IP Directors have also irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting (or, in the event that the Offer is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer) in respect of any Fusion IP Shares that they acquire on the exercise of options over Fusion IP Shares, to the extent such Fusion IP Shares have been issued on or before the Effective Date.

In addition, IP Group has received an irrevocable undertaking to vote, or procure the vote, in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting (or, in the event the Offer is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer) from Lansdowne Partners Limited in respect of 18,150,000 Fusion IP Shares, representing approximately 16.6 per cent. of the issued share capital of Fusion IP as at 22 January 2014 (being the last Business Day prior to the date of this announcement). This undertaking will lapse if, not later than 3.00 pm on the fifth day after the date of the Scheme Document (or Offer document), a higher competing offer (being a non preconditional offer providing for consideration of no less than 110 per cent. of the value of the Offer at the time such offer is made) is made for the entire issued and to be issued share capital of Fusion IP, and if IP Group does not make a higher revised offer within seven days of the date of the higher competing offer being made.

Accordingly therefore, IP Group has received irrevocable undertakings over, in aggregate, a total of 22,159,996 Fusion IP Shares, representing approximately 20.2 per cent. of the issued share capital of Fusion IP as at 22 January 2014 (being the last Business Day prior to the date of this announcement).

Further details of these irrevocable undertakings are set out in Appendix III (Irrevocable Undertakings) to this announcement.

Apart from the irrevocable undertakings described above, neither IP Group nor any persons acting in concert with IP Group for the purposes of the Offer has any arrangement with any persons relating to the securities of Fusion IP including any indemnity or option agreement and any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which may be an inducement to deal or refrain from dealing.

7. Information relating to IP Group

IP Group is a public limited company registered in England and Wales; it is admitted to listing on the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities, with a market capitalisation of approximately £675 million (as at 22 January 2014, being the last practicable date prior to the date of this announcement). 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, spin-out companies based on that innovation, to take a significant minority equity stake in those spin-out companies and then to grow the value of that equity over time taking an active role in the development of such spin-out companies. IP Group's strategy has been to build significant minority equity stakes across a diversified portfolio of companies 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. IP Group entered into its first long term partnership with the University of Oxford's Chemistry Department in 2000 and now has direct contractual arrangements covering eleven of the UK's leading universities including, most recently, the entry into an IP commercialisation agreement with the University of Manchester in February 2013. In addition, in 2009, IP Group acquired a strategic stake in Fusion IP and entered into a co-investment agreement with Fusion IP relating to spin-out companies arising from its university partners and, in 2011, IP Group broadened its relationship with the University of Oxford by acquiring a stake in Technikos LLP, which has a long-term relationship with the Institute of Biomedical Engineering. Further, in October 2013, IP Group completed a £5.0 million strategic investment in Cambridge Innovation Capital plc and also entered into a memorandum of understanding with the same in relation to information sharing and access to co-investment opportunities.

IP Group also has informal arrangements with other universities in the UK and it leverages the capabilities of its in-house sourcing team to identify and pursue compelling standalone opportunities arising from such universities.

In December 2013, IP Group announced that it had expanded its access to intellectual property beyond the UK to the east coast of the United States by its entry into IP commercialisation agreements with Columbia Technology Ventures, the technology transfer office of Columbia University and The University of Pennsylvania and the University of Pennsylvania's Center for Technology Transfer's UPstart company formation programme (UPstart).

As at 31 December 2013, IP Group had a portfolio of 72 companies in which its combined stake was valued at approximately £286 million, calculated by reference to the values attributed to the Group's investments in such portfolio companies in the Group's unaudited consolidated management accounts of the Group at this date. Up to this date, IP Group had invested approximately £122 million in aggregate in its portfolio and had made cash realisations of approximately £42 million. The fair value of the Group's holdings in portfolio companies at, and cash realisations to, 31 December 2013 represents approximately 2.7 times the total cash invested by the Group into its portfolio companies since 2001.

In addition, IP Group has a FCA regulated venture capital fund management subsidiary, Top Technology Ventures, which specialises in providing equity funding for early stage technology based growth companies and currently manages three funds, the £31 million IP Venture Fund, the £25 million North East Technology Fund and the £30 million IP Venture Fund II.

8. Information relating to Fusion IP

Fusion IP was established in 2002 to commercialise university-generated intellectual property and currently has agreements with four UK universities: the University of Sheffield, Cardiff University, the University of Nottingham and Swansea University.

Fusion IP works in partnership with these Universities to identify the IP that they believe has the greatest commercial potential and then invests its money and resources in such inventions in order to generate value from this world-class research. This enables Fusion IP to invest in some of the world's most advanced science and turn world-class research into a commercial opportunity, either through the creation of a spin-out company or a licence.

Since its establishment, Fusion IP has constructed a well-balanced portfolio of engineering, software and medical businesses and currently has shareholdings in over 20 companies, including significant shareholdings in Diurnal, Phase Focus, Magnomatics, Seren, MedaPhor, FCL and Asalus.

In 2012, Fusion IP announced its first major portfolio company exit, when it sold its portfolio company Simcyp, a research-based business providing a modelling and simulation platform for predicting the fate of drugs in virtual populations, to US based Certara LP for $32 million, a 200-fold return on its original investment.

In 2009 IP Group acquired a strategic stake in Fusion IP (by way of a £3.2 million share subscription) and also entered into a co-investment agreement with Fusion IP relating to spin-out companies originating from Fusion IP's university partners. In the first quarter of 2013, Fusion IP raised an additional £20 million through a placing to existing and new institutional shareholders.

As at 31 July 2013, Fusion IP had a portfolio of 29 companies. The value of Fusion IP Group's investments in spin-out companies increased to £25.0 million in the year ended 31 July 2013 (2012: £19.8 million). The net gain in the fair value of investments in the year ended 31 July 2013 amounted to £1.11 million (2012: £3.57 million). The Fusion IP Group's gains mainly arose from valuation uplifts in five of the Fusion IP Group's holdings during the year (2012: eight), with uplifts in Diurnal and Asalus being the major components.

Fusion IP is incorporated in England and Wales and headquartered in Sheffield, UK. Fusion IP was admitted to trading on AIM in February 2005 and currently has a market capitalisation of £69 million as at 22 January 2014 (being the last Business Day prior to the date of this announcement)

9. Offer Related Arrangements

IP Group and Fusion IP have entered into a confidentiality agreement dated 26 November 2013, pursuant to which IP Group and Fusion IP have undertaken, subject to certain exceptions, to keep information disclosed by the other party confidential and not to disclose it to third parties (other than their respective officers, employees, agents and professional advisers for the purpose of the Offer). The confidentiality agreement is available for inspection as referred to in paragraph 18 below.

10. Management, employees and locations

Upon the Scheme becoming effective, Doug Liversidge will join the IP Group Board as a Non-Executive Director and David Baynes will join the IP Group Board as an Executive Director. The IP Group Board currently comprises Dr Bruce Smith, Alan Aubrey, Greg Smith, Mike Townend, Charles Winward, Mike Humphrey, Jonathan Brooks and Francis Carpenter. Each of the Fusion IP Directors will resign from the Fusion IP Board. Dr Peter Grant and Stuart Gall, each a Fusion IP Director, will join the management team of the Enlarged Group following the Effective Date.

Other than in respect of David Baynes and Doug Liversidge, who will each have new terms of employment and appointment with IP Group respectively, the IP Group Board has no current intention of implementing any headcount reduction amongst Fusion IP employees or of making any material changes to the terms and conditions of their employment, and has given assurances that the existing employment rights, including accrued pension, benefits and other rights, of all Fusion IP employees will be fully safeguarded.

The Enlarged Group's head office and registered address will continue to be located in London. IP Group intends to retain the existing leasehold premises of Fusion IP in Cardiff and Sheffield, together with the licensed premises in Nottingham, providing an enhanced national presence for the Enlarged Group.

From the Effective Date, all Fusion IP employees will be eligible to participate in the IP Group Annual Incentive Scheme, further details of which will be set out in the Scheme Document.

11. Incentive arrangements to be issued to certain Fusion IP directors

In 2013, and prior to the IP Group Board approaching the Fusion IP Board in connection with the Offer, it was the intention of the Fusion IP Board to adopt a new incentive scheme to reward the executive directors of Fusion IP in order to facilitate the retention of valuable employees and encourage them to align their interests more closely with those of Fusion IP's shareholders.

On 22 January 2014, the Fusion IP Board approved and adopted the Fusion IP LTIP, the rules of which are based on the terms provisionally agreed by the Fusion IP Board in 2013, and conditionally awarded each of David Baynes, Stuart Gall and Peter Grant, one million Fusion IP Shares. Such awards will vest on 31 December 2017 provided certain performance conditions are met, which relate to, inter alia, the growth in value of Fusion IP's portfolio companies and the continued employment of the relevant Fusion IP Director. Upon such vesting, each of David Baynes, Stuart Gall and Peter Grant will be issued and allotted with 0.446 of an IP Group Share for each Fusion IP Share which they are entitled to pursuant to the terms of the Fusion IP LTIP.

Cenkos has confirmed its opinion as adviser to Fusion IP that the Fusion IP LTIP and the awards made are fair and reasonable. Further details of the Fusion IP LTIP and proposed incentive arrangement will be set out in the Scheme Document.

12. Fusion IP Share Schemes

The Offer will extend to Fusion IP Shares resulting from any exercise of options under the Fusion IP Share Schemes. Participants in the Fusion IP Share Schemes will be contacted regarding the effect of the Offer on their rights under the Fusion IP Share Schemes and appropriate proposals will be made to such participants in due course. It is not expected such proposals will be made immediately, but they will be made in advance of the Scheme becoming Effective.

Options over a total of 539,999 Fusion IP Shares under the Fusion IP Share Schemes are outstanding.

13. Fusion IP Warrants

Holders of the Fusion IP Warrants will be contacted regarding the effect of the Offer on their rights in respect of the Fusion IP Warrants and appropriate proposals will be made in due course to such warrant holders. It is not expected that such proposals will be made immediately, but they will be made in advance of the expected completion of the Offer.

14. Structure of the Offer

It is intended that the Offer will be implemented by means of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act, although, IP Group reserves the right to elect to implement the Offer, with the consent of the Panel, by way of a Takeover Offer.

The Scheme is an arrangement between Fusion IP and Scheme Shareholders that provides for IP Group to become the holder of the entire issued and to be issued ordinary share capital of Fusion IP, to the extent not already owned by IP Group. This procedure involves, amongst other things, an application by Fusion IP to the Court to sanction the Scheme and confirm the Capital Reduction, pursuant to which the Scheme Shares will be cancelled, and the issue of New Fusion IP Shares to IP Group, in consideration for which Scheme Shareholders will receive New IP Group Shares on the basis set out in paragraph 2 of this announcement.

The Scheme requires the sanction of the Court as well as well as the satisfaction, or where applicable, waiver, of the Conditions set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement.

To become effective, the Scheme must be approved by a majority in number of those Scheme Shareholders present and voting, either in person or by proxy, at the Court Meeting, representing 75 per cent. or more in value of the Scheme Shares voted by those Scheme Shareholders. In addition, the Special Resolution (which requires at least 75 per cent. of those votes cast whether in person or by proxy) must be passed by Fusion IP Shareholders at the General Meeting.

Following the Court Meeting and the General Meeting, the Scheme also requires the sanction of the Court as well as the satisfaction, or where applicable, waiver, of the Conditions set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement.

Upon the Scheme becoming effective, it will be binding on all Scheme Shareholders, irrespective of whether or not, being entitled to do so, they attended or voted at the Court Meeting or the General Meeting or, if they did vote, whether or not they voted in favour of the Scheme.

The Offer will lapse if the Scheme does not become Effective by the Long Stop Date (or such later date as IP Group and Fusion IP may, with the consent of the Panel (if required), agree and the Court may allow).

Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document, together with notices of the Court Meeting and the General Meeting and the accompanying Forms of Proxy, which are expected to be despatched to Fusion IP Shareholders as soon as reasonably practicable. It is currently expected that the Scheme will become Effective in March 2014, with settlement within 14 days of the Effective Date, in accordance with the Code.

15. Delisting from AIM and re-registration

It is anticipated that, the last day of dealings in, and for registration of transfers of, Fusion IP Shares is expected to be 18 March 2014, being the Business Day immediately prior to the Reduction Court Hearing, and at 8.00 a.m. on the date of the Reduction Court Hearing, the trading of the Fusion IP Shares on AIM will be suspended. No transfers of Fusion IP Shares will be registered after that time and date.

Prior to the Scheme becoming effective, an application will be made to the London Stock Exchange for the Fusion IP Shares to cease to be admitted to trading on AIM. It is expected that such cancellation will take place at 8.00 a.m. on 20 March 2014.

It is intended that, pursuant to the Scheme, Fusion IP will be re-registered as a private limited company under the relevant provisions of the Companies Act.

16. Disclosure of interests in Fusion IP

In November 2009, IP Group acquired approximately 19.8 per cent. of the issued share capital of Fusion IP; IP Group currently has an interest in 20.1 per cent. of Fusion IP's issued share capital.

In so far as the IP Group Directors are aware, none of the IP Group Directors, or any person acting in concert with the IP Group Directors, own or control any Fusion IP Shares or hold any options to purchase Fusion IP Shares or any derivatives referenced to securities of Fusion IP that remain outstanding or have any short positions in respect of any Fusion IP Shares or have borrowed or lent any Fusion IP Shares.

Furthermore, no dealing arrangement exists with IP Group or any person acting in concert with IP Group in relation to Fusion IP Shares. For these purposes, "arrangement" includes any indemnity or option arrangement, any agreement or understanding, formal or informal, and of whatever nature, relating to Fusion IP Shares which may be an inducement to deal or refrain from dealing such securities.

IP Group confirms that it will make an Opening Position Disclosure on the date of this announcement setting out the details required to be disclosed by Rule 8.1(a) of the Code.

17. IP Group Capital Raising

The IP Group Board today announced that it intends to raise up to approximately £75.0 million (approximately £72.9 million net of all costs and expenses) in a capital raising by way of Firm Placing and Placing, Open Offer and Offer for Subscription consisting of the issue of up to 45,454,856 New IP Group Shares, in aggregate, at an issue price of 165 pence per New IP Group Share. The IP Group Board has the ability to increase the size of the Capital Raising by up to one third should there be sufficient demand, such that gross proceeds would be approximately £100 million (approximately £97.4 million net of all costs and expenses. The Issue Price represents a discount of 14.9 pence (being approximately 8.3 per cent.) to the closing middle market price (as derived from the Daily Official List) of 179.9 pence per IP Group Share on 22 January 2014 (being the last Business Day prior to the date of this announcement).

On the basis that approximately £75.0 million is raised, the Capital Raising will result in 45,454,856 New IP Group Shares being issued (representing approximately 12.1 per cent. of the existing issued share capital of IP Group). On the basis that the Capital Raising size is increased to a maximum of approximately £100.0 million, the Capital Raising would result in 60,606,060 New IP Group Shares being issued (representing approximately 16.2 per cent. of the existing issued share capital of IP Group). The actual number of New IP Group Shares to be issued pursuant to the Capital Raising will be notified by IP Group via a Regulatory Information Service announcement prior to Capital Raising Admission.

The Scheme is not conditional on completion of the Capital Raising and the Capital Raising is not conditional on the Scheme becoming effective.

It is intended that the Capital Raising will enable the Group and, following completion of the Offer, the Enlarged Group to continue to have flexibility to lead subsequent investment rounds in both existing and future post-seed companies, decreasing its reliance on external capital and allowing it to maintain significant minority equity stakes with a view to continuing to generate strong equity returns.

The Firm Placees have conditionally agreed to subscribe for 30,303,030 New IP Group Shares in aggregate at the Issue Price (representing gross proceeds of approximately £50.0 million). The Firm Placing is underwritten by Numis.

IP Group is proposing to issue up to a further 15,151,826 New IP Group Shares pursuant to the Placing, Open Offer and Offer for Subscription, none of which are underwritten. The Offer for Subscription is being made available to Fusion IP Shareholders should they wish to participate. The Capital Raising will close on 11 February 2014, prior to the date upon which Fusion IP Shareholders are required to vote at the Meetings.

The Capital Raising is conditional, amongst other things, on IP Group Shareholders passing the necessary resolutions to approve the Capital Raising at a general meeting to be convened on 12 February 2014.

Following the Scheme becoming Effective the Consideration Shares to be issued would represent 10.4 per cent. of the current existing shares in the capital of IP Group and 8.5 per cent. of the share capital of IP Group as enlarged by the issue of the Consideration Shares and such number of New IP Group Shares as would result from a Capital Raising of approximately £75 million.

18. Documents available for inspection

Copies of the following documents will be available by not later than 12 noon on the Business Day immediately following the date of this announcement on Fusion IP's website www.fusionip.co.uk and on IP Group's website www.ipgroupplc.com:

(a) this announcement;

(b) the irrevocable undertakings referred to in paragraph 6 above and summarised in Appendix III (Irrevocable Undertakings) to this announcement); and

19. Taxation

Any Fusion IP Shareholder who holds (either alone or together with persons connected with him) more than five per cent. of, or any class of, shares in or debentures of Fusion IP is advised that clearance under section 138 of the Taxation of Chargeable Gains Act 1992 in respect of the Acquisition has been sought from HMRC and provided such clearance is granted New IP Group Shares acquired by such a shareholder will be treated for tax purposes as the same asset as those Fusion IP Shares in respect of which he received the New IP Group Shares, acquired at the same time and for the same consideration as those Fusion IP Shares.

20. General

IP Group reserves the right, with the consent of the Panel, to elect to implement the Offer by way of a Takeover Offer as an alternative to the Scheme. In such event, the Offer will be implemented on substantially the same terms as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 90 per cent. of the Fusion IP Shares to which such offer relates or such lesser percentage, being more than 50 per cent., as IP Group may decide).

The Offer will be made subject to the Conditions and further terms set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement and to be set out in the Scheme Document. The sources and bases of certain financial information contained in this announcement are set out in Appendix II (Sources and Bases) to this announcement. A summary of the irrevocable undertakings is contained in Appendix III (Irrevocable Undertakings) to this announcement) to this announcement. Certain terms used in this announcement are defined in Appendix IV (Definitions) to this announcement.

Enquiries:

IP Group plc	+44 (0) 20 7444 0050
Alan Aubrey, Chief Executive Officer
Greg Smith, Chief Financial Officer Liz Vaughan-Adams, Communications	+44 (0) 20 7444 0062 / +44 (0) 7979 853 802 liz.vadams@ipgroupplc.com
Numis Securities Limited (Financial Adviser to IP Group)	+44 (0) 20 7260 1000
Etienne Bottari / Michael Meade / Freddie Barnfield (Corporate Finance) James Black (Corporate Broking)
FTI Consulting (IP Group's PR Adviser)	+44 (0) 20 7831 3113
Ben Atwell John Dineen

Fusion IP plc	+44 (0) 114 275 5555
David Baynes, CEO Stuart Gall, Press Relations

Cenkos Securities plc (Financial Adviser to Fusion IP)	+44 (0) 20 7397 8900
Bobbie Hilliam Harry Pardoe (Corporate Finance)

Allerton Communications (Fusion IP's PR Adviser)	+44 (0) 20 3137 2500
Peter Curtain

This summary should be read in conjunction with the full text of this announcement including the appendices to this announcement. The Offer will be subject to the Conditions and further terms set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II (Sources and Bases) to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III (Irrevocable Undertakings) contains a summary of the irrevocable undertakings currently received, and Appendix IV (Definitions) to this announcement contains definitions of certain expressions used in this summary and in this announcement.

Please be aware that addresses, electronic addresses and certain information provided by Fusion IP Shareholders, persons with information rights and other relevant persons for the receipt of communications from Fusion IP may be provided to IP Group during the offer period as requested under Section 4 of Appendix 4 of the Code to company with Rule 2.12(c).

Further information

This announcement is for information purposes only and is not intended to and does not constitute or form part of an offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy any securities or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme Document and the accompanying documents, including the IP Group Prospectus and the Forms of Proxy, which will together contain the full terms and conditions of the Offer, including details of how to vote in respect of the Offer. Any approval, decision or other response to the Offer should be made only on the basis of the information in the Scheme Document and the accompanying documents sent by Fusion IP to Fusion IP Shareholders.

Numis, which is authorised and regulated by the FCA, is acting for IP Group and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than IP Group for providing the protections afforded to clients of Numis, or for providing advice in connection with the matters set out in this announcement or any matters referred to herein. To the fullest extent permitted by applicable law and regulation, Numis, its affiliates, directors, employees and/or agents expressly disclaim any and all liability relating to, or resulting from, the use of all or any part of this announcement or any of the information contained herein.

Cenkos, which is authorised and regulated by the FCA, is acting exclusively for Fusion IP and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than Fusion IP for providing the protections afforded to clients of Cenkos, or for providing advice in connection with the matters set out in this announcement or any matters referred to herein. Neither Cenkos nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Cenkos in connection with this announcement, any statement contained herein or otherwise.

Overseas shareholders

The availability of the Offer or the release, publication or distribution of this announcement in jurisdictions other than the United Kingdom may be restricted by law and therefore any persons who are not resident in the United Kingdom or subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. This announcement has been prepared for the purposes of complying with English law and the 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 England and Wales. In particular, a transaction effected by means of a UK scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Scheme is subject to the disclosure requirements, rules and practices applicable in the United Kingdom to schemes of arrangement, which differ from the requirement of US proxy solicitation or tender offer rules.

Notice to US Investors in Fusion IP

Cautionary note regarding forward looking statements

Certain statements contained in this announcement constitute "forward looking statements". These statements relate to IP Group's or the Enlarged Group's future prospects, developments and business strategies. In some cases, these forward looking statements can be identified by the use of forward looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or their negatives or other variations or comparable terminology. Such forward looking statements are based on current expectations and on numerous assumptions regarding the business strategies and the environment in which IP Group or the Enlarged Group will operate in the future and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. If any one or more of these risks or uncertainties materialises or if any one or more of the assumptions prove incorrect, actual results may differ very materially from those expected, estimated or projected. Given these risks and uncertainties, potential investors should not place any reliance on forward looking statements.

No profit forecast

Disclosure requirements of the Code

Under Rule 8.3(a) of the 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 paper 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 a public Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement (as defined in the Code) in which any paper 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 paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm on the tenth Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm on the tenth Business Day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a public Dealing Disclosure (as defined in the Code).

Under Rule 8.3(b) of the 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 paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper 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 paper offeror, save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm on the Business Day following the date of the relevant dealing.

Publication on website

A copy of this announcement will be available, free of charge, subject to certain restrictions relating to persons resident in Restricted Overseas Jurisdictions on Fusion IP's website at www.fusionip.co.uk and on IP Group's website at www.ipgroup.com under the Investor Relations section by no later than 12 noon on the day following this announcement. For the avoidance of doubt, neither the content of the websites referred to above (nor any other website) nor the contents of any website accessible from hyperlinks on any such website is incorporated into, or forms part of, this announcement.

Rule 2.10 requirement

In accordance with Rule 2.10 of the Code, Fusion IP confirms that it has 109,437,096 ordinary shares of 1.0 pence each in issue, which are admitted to trading on AIM. The ISIN of the Fusion IP Shares is GB00B05L5X50. Fusion IP also has 3,675,000 warrants in issue which carry no voting rights and which are not admitted to trading or listing on any market.

APPENDIX I

CONDITIONS AND CERTAIN FURTHER

TERMS OF THE ACQUISITION

Part A: Conditions of the Scheme

The Acquisition is conditional upon the Scheme becoming unconditional and becoming effective by no later than the Long Stop Date, or such later date (if any) as IP Group and Fusion IP may (with the consent of the Panel) agree and, if required, the Court may allow.

1. The Scheme is conditional upon:

1.1 its approval by a majority in number representing not less than 75 per cent. in value of the Scheme Shareholders (or the relevant class or classes thereof, if relevant) who are on the register of members of Fusion IP at the Voting Record Time, in respect of the Court Meeting, and who are present and vote, either in person or by proxy, at the Court Meeting and at any separate class meeting which may be required by the Court or any adjournment of any such meeting;

1.2 the Fusion IP Shareholder Resolution being duly passed by the requisite majority or majorities at the Fusion IP General Meeting or at any adjournment of that meeting; and

1.3 the sanction of the Scheme with or without modification (but subject to such modification being on terms reasonably acceptable to IP Group and Fusion IP) and the confirmation of the Capital Reduction by the Court and the delivery of the Court Orders and the Statement of Capital to the Registrar of Companies.

2. In addition, IP Group and Fusion IP have agreed that the Acquisition is conditional upon the following conditions, and accordingly the necessary actions to make the Scheme effective will not be taken unless the following conditions (as amended if appropriate) have been satisfied (and continue to be satisfied pending the commencement of the Scheme Court Hearing) or, where relevant, waived prior to the Scheme being sanctioned by the Court:

2.1 all necessary notifications, filings and applications having been made, all regulatory and statutory obligations in any relevant jurisdiction having been complied with, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulations of any relevant jurisdiction having expired, lapsed or been terminated in each case in respect of the Acquisition or any aspect of the Acquisition or its financing, the acquisition or proposed acquisition of any shares or other securities in, or control of, Fusion IP or any other member of the Wider Fusion IP Group by any member of the Wider IP Group or the carrying on by any member of the Wider Fusion IP Group of its business;

2.2 except as Publicly Announced or Fairly Disclosed, there being no provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Wider Fusion IP Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or subject, which in each case as a consequence of the Acquisition, the acquisition or proposed acquisition of any shares or other securities in Fusion IP or because of a change in the control or management of Fusion IP, could or might reasonably be expected to result in (to an extent or in a manner which is material and adverse in the context of the Acquisition or would have a material and adverse effect on the Wider Fusion IP Group as a whole):

2.2.1 any such agreement, arrangement, licence, permit or instrument or the rights, liabilities, obligations or interests or business of any member of the Wider Fusion IP Group thereunder, or interests or business of any such member in or with any other person, firm, company or body (or any arrangements to which any such member is a party relating to any such interests or business), being or becoming capable of being terminated or modified or adversely affected or any obligation or liability arising or any action being taken or arising thereunder;

2.2.2 the rights, liabilities, obligations or interests of any member of the Wider Fusion IP Group under any such agreement, arrangement, licence, permit or instrument or the interests or business of any such member in or with, any person, firm, company or body (or any arrangement or arrangements relating to any such interests or business) being terminated, adversely modified or adversely affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

2.2.3 any asset owned or used by any member of the Wider Fusion IP Group, or any interest in such asset, being or falling to be disposed of or charged or ceasing to be available to any member of the Wider Fusion IP Group or any right arising under which any such asset or interest could be required to be disposed of or charged or cease to be available to any member of the Wider Fusion IP Group;

2.2.4 the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interest of any member of the Wider Fusion IP Group or any such mortgage, charge or other security (whenever created, arising or having arisen) becoming enforceable or being capable of being enforced;

2.2.5 the value of any member of the Wider Fusion IP Group or its financial or trading position or prospects being prejudiced or adversely affected;

2.2.6 any member of the Wider Fusion IP Group ceasing to be able to carry on business under any name which it at present uses;

2.2.7 the creation of any liability (actual or contingent) by any member of the Wider Fusion IP Group;

2.2.8 any liability of any member of the Wider Fusion IP Group to make any severance, termination, bonus or other payment to any of its directors or other officers;

2.2.9 any requirement on any member of the Wider Fusion IP Group to acquire, subscribe, pay up or repay any shares or other securities; or

2.2.10 any monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to any member of the Wider Fusion IP Group, being or becoming repayable or capable of being declared repayable immediately or prior to its or their stated maturity date or repayment date, or the ability of such member of the Wider Fusion IP Group to borrow monies or incur any indebtedness becoming or being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

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 Fusion IP Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, could reasonably be expected to result in any of the events or circumstances as are referred to in paragraphs 2.2.1 to 2.2.10 (inclusive) of this Condition;

2.3 no government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body (including without limitation, any national or supranational anti-trust or competition authority), court, trade agency, association, institution or any other person or body whatsoever in any relevant jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference, or having made, proposed or enacted, any statute, regulation, decision or order, or taken any other steps which would or might be expected to (to an extent or in a manner which is material and adverse in the context of the Acquisition):-

2.3.1 require, prevent, limit or delay the divestiture, or alter the terms for any proposed divestiture, by any member of the Wider Fusion IP Group or by any member of the IP Group of all or any portion of their respective businesses, assets, undertakings or properties or impose any limitation on the ability of any of them to conduct all or any portion of their respective businesses (or any of them) or own or control all or any portion of their respective assets or properties;

2.3.2 require, prevent, limit or delay the divestiture by any member of the Wider Group of any shares or other securities in any member of the Wider Fusion IP Group;

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

2.3.4 require any member of the Wider Group or the Wider Fusion IP Group to acquire, offer to acquire, redeem or repay any shares or other securities (or interest in) and/or any indebtedness of any member of the Wider Fusion IP Group or the Group owned by or owed to any third party;

2.3.5 make the Acquisition or its implementation or the acquisition or proposed acquisition by IP Group of any shares or other securities in, or control or management of, Fusion IP or any other member of the Wider Fusion IP Group void, illegal, and/or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, or delay the same, or impose any additional conditions or financial or other obligations with respect thereto, or otherwise challenge, hinder or interfere, therewith or require amendment to the Acquisition or its implementation;

2.3.6 otherwise adversely affect any or all of the business, assets, liabilities, financial or trading positions, profits, operational performances or prospects of any member of the Wider Fusion IP Group or the Wider Group in a manner which is adverse to the obligations of the Wider Group taken as a whole in connection with the Acquisition;

2.3.7 impose any limitation on the ability of any member of the Wider Group or the Wider Fusion IP Group to conduct or integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Group or the Wider Fusion IP Group;

2.3.8 require any member of the Wider Fusion IP Group to relinquish, terminate or amend in any way any contract to which any member of the Wider Fusion IP Group is a party; or

2.3.9 result in any member of the Wider Fusion 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 Third Party could institute, implement or threaten any action, proceedings, suit, investigation, enquiry or reference or any other step under the laws of any relevant jurisdiction in respect of the Acquisition or the acquisition or proposed acquisition of any Fusion IP Shares having expired, lapsed or been terminated;

2.4 any one of the following conditions having been fulfilled:

2.4.1 issuance of a decision by the Office of Fair Trading (the "OFT") or Competition and Markets Authority (the "CMA") that the Acquisition does not constitute a relevant merger situation pursuant to section 23 of the Enterprise Act 2002 (the "Enterprise Act"); or

2.4.2 issuance of a decision by the OFT or CMA pursuant to sections 22 or 33 of the Enterprise Act that a reference will not be made in respect of the Acquisition 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

2.4.3 if the Acquisition has been notified to the OFT by way of a merger notice pursuant to section 96 of the Enterprise Act, the earlier of:

(a) expiry of the period for the OFT to consider the merger notice as prescribed by section 97 of the Enterprise Act without a reference being made in respect of the Acquisition pursuant to sections 22 or 33 of the Enterprise Act,; or

(b) 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 OFT pursuant to Condition 2.4.2 above; or

2.4.4 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 Acquisition, but without such a decision having been issued, by the CMA pursuant to sections 22 or 33 of the Enterprise Act, provided that in the event that none of the conditions set out in paragraphs 2.4.1 to 2.4.4 in this Condition 2.4 have been met prior to 1 April 2014, completion of the acquisition shall also be conditional on the CMA not having already made an order pursuant to section 72(2) of the Enterprise Act in terms that would prevent the Scheme becoming unconditional and effective;

2.5 all notifications, notices, filings or applications in connection with the Acquisition or any aspect of the Acquisition or its financing that are necessary having been made and all authorisations, orders, grants, consents, clearances, licences, confirmations, permissions and approvals which are necessary ("Authorisations"), in any jurisdiction, for and in respect of the Acquisition or any aspect of the Acquisition or its financing, or the acquisition or proposed acquisition by any member of the Wider Group of any shares or other securities in, or control of, Fusion IP by any member of the Wider Group having been obtained in terms and in a form reasonably satisfactory to IP Group from all appropriate Third Parties and persons or bodies with whom any member of the Wider Fusion IP Group has entered into contractual arrangements, and all such Authorisations together with all authorisations, orders, grants, consents, clearances, licences, confirmations, permissions and approvals ("Business Authorisations") necessary or appropriate for any member the Wider Group to carry on its business remaining in full force and effect (where the absence of such Authorisations or Business Authorisations would be material and adverse in the context of the Acquisition) 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 Acquisition becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

2.6 since 31 July 2013 and except as Publicly Announced or Fairly Disclosed, no member of the Wider Fusion IP Group having (to an extent or in a manner which is material in the context of the Acquisition or would have a material and adverse effect on the Wider Fusion IP Group taken as a whole):

2.6.1 save as between Fusion IP and wholly-owned subsidiaries of Fusion IP issued, agreed to issue, authorised or proposed the issue of additional shares of any class, or of securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or redeemed, purchased or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

2.6.2 other than to another member of the Fusion IP Group, 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;

2.6.3 save for transactions between members of the Fusion IP Group, 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 merger, demerger, acquisition, disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business;

2.6.4 save for transactions between members of the Fusion IP Group, made or authorised or proposed or announced an intention to propose any change in its loan capital;

2.6.5 issued, authorised or proposed the issue of any debentures or (save in the ordinary course of business or for transactions between members of the Fusion IP Group) incurred or increased any indebtedness or become subject to any liability (actual or contingent);

2.6.6 implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business or in respect of the Acquisition;

2.6.7 entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction, arrangement 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 materially restrictive on the businesses of any member of the Wider Fusion IP Group or the Wider Group or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business and which is material in the context of the Wider Fusion IP Group taken as a whole;

2.6.8 (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 instituted or threatened against it or petition presented or order made for its winding-up (voluntary or otherwise), 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;

2.6.9 been unable to pay its debts as they fall due or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

2.6.10 entered into any contract, transaction or arrangement which would be materially restrictive on the business of any member of the Wider Fusion IP Group or the Wider Group other than to a nature and extent which is normal in the context of the business concerned;

2.6.11 waived or compromised any material claim otherwise than in the ordinary course of business;

2.6.12 entered into any material contract, commitment, arrangement or agreement otherwise than in the ordinary course of business 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;

2.6.13 in respect of the Fusion IP Group, made any alteration to its memorandum or articles of association (in each case, other than an alteration in connection with the Scheme);

2.6.14 proposed, agreed to provide or modified the terms of any employee share scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider Fusion IP Group or entered into or changed the terms of any contract with any director or senior executive,

and, for the purposes of this Condition, the term Fusion IP Group shall mean Fusion IP and its wholly-owned subsidiaries;

2.7 since 31 July 2013 and save as Publicly Announced or Fairly Disclosed, or where not material in the context of the Wider Fusion IP Group taken as a whole:

2.7.1 no material adverse change or deterioration having occurred (or circumstances having arisen which would or might be expected to result in any adverse change or deterioration) in the business, assets, liabilities, financial or trading position or profits, operational performance or prospects of any member of the Wider Fusion IP Group;

2.7.2 no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider Fusion IP 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 Fusion IP Group having been instituted, announced, implemented or threatened by or against or remaining outstanding in respect of any member of the Wider Fusion IP Group;

2.7.3 no enquiry or investigation by, or complaint or reference to, any Third Party having been threatened in writing, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Wider Fusion IP Group;

2.7.4 no contingent or other material liability in respect of any member of the Wider Fusion IP Group having arisen or become apparent or increased that might reasonably be likely to adversely affect any member of the Wider Fusion IP Group that is material in the context of the Wider Fusion IP Group taken as a whole;

2.7.5 no amendment or termination of any joint venture or partnership to which any member of the Wider Fusion IP Group is a party having been agreed or permitted; and

2.7.6 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 Fusion IP Group which is necessary for the proper carrying on of its business, in each case, to an extent or in a manner which is material in the context of the Acquisition and would have a material and adverse effect on the Wider Fusion IP Group, taken as a whole;

2.8 except as Publicly Announced or Fairly Disclosed, IP Group not having discovered:

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

2.8.2 that any member of the Wider Fusion IP Group is subject to any liability (actual or contingent) that has not been Publicly Announced or Fairly Disclosed;

2.8.3 that any member of the Wider Fusion IP Group, partnership, company or other entity in which any member of the Wider Fusion IP Group has a significant economic interest and which is not a subsidiary undertaking of Fusion IP is subject to any liability (contingent or otherwise) which is not disclosed in the annual report and accounts of Fusion IP for the year ended 31 July 2013; or

2.8.4 any information which affects the import of any information disclosed in writing at any time by or on behalf of any member of the Wider Fusion IP Group, in each case, to an extent or in a manner which is material in the context of the Acquisition and would have a material and adverse effect on the Wider Fusion IP Group, taken as a whole; and

2.9 except as Publicly Announced or Fairly Disclosed, IP Group not having discovered that:

2.9.1 any past or present member of the Wider Fusion IP Group has failed to comply with any and/or all applicable legislation or regulation, of any jurisdiction with regard to the disposal, spillage, release, discharge, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health or animal health or otherwise relating to environmental matters, or that there has otherwise been any such disposal, spillage, release, discharge, leak or emission (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) any of which disposal, spillage, release, discharge, leak or emission would be likely to give rise to any liability (actual or contingent) on the part of any member of the Wider Fusion IP Group;

2.9.2 there is, or is likely to be, for that or any other reason whatsoever, any liability (actual or contingent) of any past or present member of the Wider Fusion IP Group to make good, repair, reinstate or clean up any property or any controlled waters now or previously owned, occupied, operated or made use of or controlled by any such past or present member of the Wider Fusion IP Group, under any environmental legislation, regulation, notice, circular or order of any Third Party in any jurisdiction;

2.9.3 any past or present member of the Wider Fusion IP Group has not complied with the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and any laws implementing the same, the UK Bribery Act 2010 and the U.S. Foreign Corrupt Practices Act of 1977; or

2.9.4 there is, or is likely to be expected to be, or there has been, any:

(a) claim brought against any member of the Wider Fusion IP Group by a person or class of persons in respect of;

(b) circumstances that exist whereby a person or class of persons would be likely to have a claim; or

(c) liability (actual or contingent) of any member of the Wider Fusion IP Group as a result of or relating to, any material, chemical, product or process of manufacture or materials now or previously held, used, sold, manufactured, carried out or under development or research by any past or present member of the Wider Fusion IP Group

in each case, other than under paragraphs (i) and (ii), which is material in the context of the Wider Fusion IP Group, taken as a whole.

3. For the purposes of these Conditions the "Wider Fusion IP Group" means Fusion IP and its subsidiary undertakings, associated undertakings and any other undertaking in which Fusion IP and/or such undertakings (aggregating their interests) have a significant interest and the "Wider Group" means IP Group and its subsidiary undertakings, associated undertakings and any other undertaking in which IP Group and/or such undertakings (aggregating their interests) have a significant interest and for these purposes "subsidiary undertaking" and "undertaking" have the meanings given by the Companies Act 2006, "associated undertaking" has the meaning given by paragraph 19 of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 other than paragraph 19(1)(b) of Schedule 6 to those Regulations which shall be excluded for this purpose, and "significant interest" means a direct or indirect interest in ten per cent. or more of the equity share capital (as defined in the Companies Act).

4. IP Group reserves the right to waive, in whole or in part, all or any of Conditions 2.1 to 2.9 (inclusive) of this Appendix I (Conditions and Certain Further Terms of the Acquisition).

5. If IP Group is required by the Panel to make an offer for Fusion IP 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.

6. Conditions 2.1 to 2.9 (inclusive) must be fulfilled, or be determined by IP Group to be or remain satisfied or (if capable of waiver) be waived prior to the commencement of the Scheme Court Hearing, failing which the Acquisition will lapse and the Scheme will not proceed. IP Group shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or treat as fulfilled any of the Conditions 2.1 to 2.9 (inclusive) at any time prior to the Long Stop Date, notwithstanding that the other Conditions (or any of them) may at an earlier date have been waived (if capable of waiver), satisfied or fulfilled and that there are, at such earlier date, no circumstances indicating that any such Condition may not be capable of satisfaction or fulfilment.

7. The Acquisition will lapse and the Scheme will not proceed if, prior to the date of the Court Meeting, the Acquisition, or any matter arising from the Acquisition, is referred to the Competition Commission in the United Kingdom.

8. IP Group reserves the right to elect (with the consent of the Panel) to implement the Acquisition by way of a takeover offer (as defined in section 974 of the Companies Act) as it may determine in its absolute discretion. In such event, such offer will be implemented on the same terms (subject to the availability of an exemption (if required) from the registration requirements of the US Securities Act and such amendments (if any) as IP Group deems necessary in connection with US securities laws), so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in method of effecting the Acquisition, but with an acceptance condition which will be set by reference to shares carrying 90 per cent. (or such lower percentage as IP Group may decide or the Panel may require) in value of the Fusion IP Shares to which the Offer relates and will be made in compliance with the procedural and filing requirements of the US securities laws, including, without limitation, Regulation 14E of the US Exchange Act. IP Group has agreed that any such Offer would remain open for acceptance for at least 60 days after the Offer Document is published.

9. The New IP Group Shares have not been and will not be registered under the US Securities Act and the New IP Group Shares will be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) of the US Securities Act and exemptions from registration and qualification under applicable state securities laws. Under the US Securities Act, persons (whether or not US persons) who are or will be "affiliates" (within the meaning of the US Securities Act) of IP Group will be subject to certain transfer restrictions relating to the New IP Group Shares received in connection with the Scheme.

10. The availability of the Scheme to persons not resident in the United Kingdom or the United States may be affected by the laws of the relevant jurisdictions. Persons who are not resident in the United Kingdom or the United States should inform themselves about and observe any applicable requirements.

The Scheme will be governed by English law and be subject to the jurisdiction of the English courts, to the Conditions and terms set out in this document and related Forms of Proxy and Form of Election. The Scheme will comply with the applicable rules and regulations of the Financial Services Authority and the London Stock Exchange and the City Code.

Part B: Certain further terms of the Acquisition

1. Fusion IP Shares which will be acquired under the Acquisition will be acquired with full title guarantee, 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 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.

2. Fractions of New IP Group Shares will not be allotted or issued pursuant to the Scheme. Fractional entitlements to New IP Group Shares will be aggregated and allotted and issued 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 £5 will not be paid to persons accepting the Acquisition but will be retained for the benefit of IP Group.

3. The New IP Group Shares to be issued pursuant to the Acquisition have not been and will not be registered under the US Securities Act in reliance upon the exemption provided by Section 3(a)(10) thereof nor under any of the relevant securities laws of any state, territory or other jurisdiction of the United States. Accordingly, the New IP Group Shares may not be offered, sold, resold, delivered, distributed or otherwise transferred directly or indirectly, in or into the United States nor to any United States person, except pursuant to exemptions from, or in transactions not subject to, applicable requirements of any such jurisdiction.

4. Applications will be made to the FCA for the New IP Group Shares to be admitted to listing on the premium segment of 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.

For the purposes of these Conditions, "Fairly Disclosed" shall mean any information which has been fairly disclosed: (i) in writing prior to the date of this announcement by or on behalf of Fusion IP to IP Group or IP Group's financial, accounting, taxation or legal advisers (specifically as IP Group's advisers in relation to the Acquisition); (ii) in Fusion IP's published annual and/or half year report and accounts for the relevant financial period or periods referred to in the relevant Condition; (iii) in a public announcement made in accordance with the AIM Rules or Disclosure and Transparency Rules of the FCA by Fusion IP prior to the date of this announcement; or (iv) in this announcement or the Scheme Document.

The Acquisition and Scheme will be governed by English law and will be subject to the jurisdiction of the English courts.

APPENDIX II

SOURCES AND BASES

1. The value placed by the Offer on the issued share capital of Fusion IP is based on 109,437,096 Fusion IP Shares in issue on 22 January 2014, being the last Business Day prior to the date of this announcement.

2. The Fusion IP Closing Price on 22 January 2014 (the last Business Day prior to the date of this announcement) was 63.0 pence per share.

3. The IP Group Closing Price on 22 January 2014 (the last Business Day prior to the date of this announcement) was 179.9 pence per share.

4. Unless otherwise stated, the financial information on Fusion IP is extracted from Fusion IP's annual report and accounts for the years ended 31 July 2013.

5. Unless otherwise stated, the financial information on IP Group is extracted from IP Group's annual report and accounts for the years ended 31 December 2012 and its unaudited interim report and accounts for the six months ended 30 June 2013.

6. Unless otherwise stated, the financial information relating to IP Group for the year ended 31 December 2013 has been sourced from the Group's unaudited consolidated management accounts for the year ended 31 December 2013.

7. The number of Consideration Shares to be issued pursuant to the Offer is based on there being 109,437,096 Fusion IP shares in issue, of which, 21,995,741 are owned by IP Group.

8. Unless otherwise stated, all prices quoted for Fusion IP Shares are sourced from Bloomberg and are closing middle market quotations derived from the London Stock Exchange Daily Official List.

APPENDIX III

IRREVOCABLE UNDERTAKINGS

PART A: FUSION IP DIRECTORS

The following Fusion IP Directors have given irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of their own beneficial holdings of issued and to be issued Fusion IP Shares as follows:

Name of Fusion IP Director	No. of Fusion IP Shares	Percentage of Fusion IP issued share capital (excluding shares under option)
David Baynes	1,333,332	1.2
Peter Grant	1,333,332	1.2
Stuart Gall	1,333,332	1.2
Doug Liversidge	10,000	0.01

The Fusion IP Directors hold options and other entitlements over, in aggregate, 133,333 Fusion IP Shares, representing approximately 0.12 per cent. of the fully diluted share capital of Fusion IP as at 22 January 2014 (being the last Business Day prior to the date of this announcement).

These irrevocable undertakings will also apply to any Fusion IP Shares acquired by the Fusion IP Directors on or before the Effective Date, and will remain binding in the event that a third party makes a competing offer and will only cease to be binding if (i) the Scheme Document (or, in the case of a Takeover Offer, the offer document, as applicable) is not published within 28 days of the date of this announcement (or such later date as Fusion IP and IP Group may, with the consent of the Panel, agree); or (ii) the Scheme does not become Effective or lapses in accordance with its terms.

PART B: OTHER IRREVOCABLES

Lansdowne Partners Limited has given an irrevocable undertaking to vote in favour in the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of 18,150,000 Fusion IP Shares, representing approximately 16.6 per cent. of the issued share capital of Fusion IP as at 22 January 2014 (being the last Business Day prior to the date of this announcement). This undertaking will lapse if, not later than 3.00 pm on the fifth day after the date of the Scheme Document (or Offer document), a higher competing offer (being a non preconditional offer providing for consideration of no less than 110 per cent. of the value of the Offer at the time such offer is made) is made for the entire issued and to be issued share capital of Fusion IP, and if IP Group does not make a higher revised offer within seven days of the date of the higher competing offer being made.

APPENDIX IV

DEFINITIONS

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

"Acquisition"	the proposed acquisition of the entire issued and to be issued share capital of Fusion IP (other than the Excluded Shares) by IP Group to be implemented by way of the Scheme (or, should IP Group elect, with the consent of the Panel, by means of a Takeover Offer) on the terms and subject to the Conditions set out in this announcement and any subsequent revision, variation, extension or renewal thereof;
"AIM"	a market of that name being operated by the London Stock Exchange;
"AIM Rules"	the rules published by the London Stock Exchange entitled AIM Rules for Companies in force from time to time;
"Business Day"	any day (excluding Saturdays and Sundays or public holidays in England and Wales) on which banks generally are open for business in London for the transaction of normal banking business;
"Capital Raising"	the Firm Placing and the Placing, Open Offer and Offer for Subscription by IP Group, announced on 23 January 2014;
"Capital Reduction"	the proposed reduction of capital under section 641 of the Companies Act associated with the Scheme;
"Cenkos"	Cenkos Securities plc, a company incorporated in England and Wales with registered number 05210733;
"Closing Price"	the closing middle market quotation of a share at the close of business on a particular trading day as derived from the Daily Official List published for that day;
"Code" or "City Code"	the City Code on Takeovers and Mergers;
"Companies Act"	the Companies Act 2006 including any statutory modification or re-enactment thereof for the time being in force;
"Competition Commission"	the body corporate known as the Competition Commission as established under section 42 of the UK Competition Act as amended;
"Conditions"	the Conditions to the implementation of the Offer, set out in Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement;
"Consideration Shares"	the New IP Group Shares to be issued to Scheme Shareholders credited as fully paid in accordance with the Scheme;
"Court"	the High Court of Justice in England and Wales;
"Court Hearings"	the Scheme Court Hearing and the Reduction Court Hearing;
"Court Meeting"	the meeting of Scheme Shareholders to be convened pursuant to an order of the Court pursuant to Part 26 Companies Act for the purpose of considering, and, if thought fit, approving the Scheme (with or without amendment) and any adjournment thereof;
"Court Orders"	the Scheme Court Order and the Reduction Court Order;
"Daily Official List"	the Daily Official List published by the London Stock Exchange;
"Effective"	(i) if the Offer is implemented by way of the Scheme, the Scheme (or, where specified, Part 1 thereof) having become effective pursuant to its terms; or
	(ii) if the Offer is implemented by way of a Takeover Offer, the Takeover Offer having been declared or become unconditional in all respects in accordance with the requirements of the Code;
"Effective Date"	the date upon which the Offer becomes Effective;
"Enlarged Group"	following completion of the Acquisition, the combined Group and Fusion IP Group;
"Excluded Shares"	any Fusion IP Share beneficially owned by IP Group or any member of the IP Group;
"FCA"	the Financial Conduct Authority of the UK;
"Firm Placed Shares"	the 30,303,030 new IP Group Shares to be allotted by IP Group pursuant to the Firm Placing;
"Firm Placees"	any person who has agreed to subscribe for Firm Placed Shares pursuant to the Firm Placing;
"Firm Placing"	the conditional placing by Numis on behalf of IP Group of the Firm Placed Shares, on the terms and subject to the conditions set out in IP Group Prospectus;
"Forms of Proxy"	the blue form of proxy for use at the Court Meeting and the white form of proxy for use at the General Meeting, which will accompany the Scheme Document;
"Fusion IP"	Fusion IP plc, a public limited company incorporated in England and Wales with registered number 05275732;
"Fusion IP Directors"	the directors of Fusion IP from time to time;
"Fusion IP Group"	Fusion IP, its subsidiaries, (intermediate or otherwise) and their subsidiary undertakings from time to time, or any of them, as the context requires;
"Fusion IP Independent Directors"	the Fusion IP Directors, excluding Alison Fielding;
"Fusion IP LTIP"	a long term incentive plan of Fusion IP approved and adopted on 22 January 2014;
"Fusion IP Shares"	the ordinary shares of 1.0 pence each in the capital of Fusion IP;
"Fusion IP Share Schemes"	(1) the agreements entered into between Fusion IP and certain persons pursuant to which Fusion IP has granted options to such persons to acquire a certain number of Fusion IP Shares; and (2) the approved share option plan of Fusion IP dated 2013;
"Fusion IP Shareholders"	holders of Fusion IP Shares;
"Fusion IP Warrants"	the 3,675,000 outstanding warrants over Fusion IPFusion IP Shares;
"General Meeting"	the general meeting of Fusion IP Shareholders to be convened to consider and, if thought fit, pass, inter alia, the Special Resolution (or any adjournment thereof);
"Group"	IP Group and its subsidiary undertakings excluding the Fusion IP Group;
"Holder"	a registered holder of shares including any persons entitled by transmission;
"intellectual property" or "IP"	means any and all patents, trade marks, rights in designs, get-up, trade, business or domain names, copyrights, and topography rights, (whether registered or not and any applications to register or rights to apply for registration of any of the foregoing), rights in inventions, know-how, trade secrets and other confidential information, rights in databases and all other intellectual property rights of a similar or corresponding character which may now or in the future subsist in any part of the world;
"IP Group"	IP Group plc, a public limited company incorporated in England and Wales with registered number 04204490;
"IP Group Directors"	the directors of IP Group from time to time;
"IP Group Annual Incentive Scheme"	the annual incentive scheme operated by IP Group;
"IP Group Prospectus"	a prospectus dated relating to IP Group containing details of, inter alia, the Capital Raising and the Acquisition to be issued by IP Group on or around 27 January 2014;
"IP Group Shares"	ordinary shares of 2 pence each in the capital of IP Group;
"Issue Price"	165 pence;
"London Stock Exchange"	the London Stock Exchange plc, together with any successor thereof;
"Long Stop Date"	1 May 2014, or such later date as IP Group and Fusion IP may agree and the Court (if required) and/or the Panel (if required) may allow;
"Meetings"	the Court Meeting and the General Meeting and "Meeting" shall mean either of them as the context dictates;
"New Fusion IP Shares"	the Fusion IP ordinary shares of 1 pence each in the capital of Fusion IP to be created and issued fully paid to IP Group pursuant to the Scheme;
"New IP Group Shares"	the new IP Group Shares to be issued to Scheme Shareholders credited as fully paid in accordance with the Scheme or new IP Group Shares issued as a result of the Capital Raising;
"Numis"	Numis Securities Limited, a company incorporated in England and Wales with registered number 02285918;
"Offer"	the recommended cash offer to be governed by the Code and made by IP Group to acquire the entire issued and to be issued share capital of Fusion IP (other than the Excluded Shares, to be effected by means of a Scheme and including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer;
"Offer for Subscription"	the offer for subscription to the public in the UK of new IP Group Shares on the terms set out in the IP Group Prospectus;
"Official List"	the Official List of the FCA;
"Open Offer"	the offer to Qualifying IP Group Shareholders, constituting an invitation to apply for the Open Offer Shares, including pursuant to the Excess Application Facility, on the terms and subject to the conditions set out in the IP Group Prospectus;
"Opening Position Disclosure"	an announcement required by the Code containing interests or share positions in, or rights to subscribe for, any relevant securities of a party to the other if the person concerned has such a position;
"Panel"	the Panel on Takeovers and Mergers;
"Placing"	the subscription by the Non-Firm Placees for the Placed Shares (each such terms as defined in the IP Group Prospectus), on the terms and subject to the conditions set out in the IP Group Prospectus;
"Publicly Announced"	announced publicly and delivered by or on behalf of Fusion IP through a Regulatory Information Service prior to the date of this announcement;
"Qualifying IP Group Shareholders"	IP Group Shareholders on the register of members of IP Group at 6.00 p.m. on 22 January 2014 with the exclusion (subject to certain exceptions) of persons with a registered address or located or resident in the US, Australia, Canada, Japan, New Zealand or the Republic of South Africa;
"Reduction Court Hearing"	the hearing at which the Reduction Court Order will be sought;
"Reduction Court Order"	the order of the Court confirming the Capital Reduction under section 648 of the Companies Act;
"Registrar of Companies"	the Registrar of Companies in England and Wales;
"Restricted Overseas Jurisdiction"	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 Fusion IP Shareholders in that jurisdiction;
"Scheme"	the proposed scheme of arrangement under Part 26 of the Companies Act between Fusion IP and Scheme Shareholders (with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by Fusion IP and IP Group);
"Scheme Court Hearing"	the hearing at which the Scheme Court Order will be sought;
"Scheme Court Order"	the order of the Court sanctioning the Scheme under section 899 of the Companies Act;
"Scheme Document"	the circular to Fusion IP Shareholders containing the terms of the Scheme containing the explanatory statement required by section 897 of the Companies Act and notices convening the Court Meeting and the General Meeting;
"Scheme Shareholder"	a Holder of Scheme Shares;
"Scheme Shares"	the Fusion IP Shares: in issue at the date of the Scheme Document; (i) in issue at the date of the document; (ii) issued after the date of the document but on or prior to the Voting Record Time in respect of the Court Meeting; and (iii) issued after the Voting Record Time in respect of the Court Meeting but on or before the Reduction Record Time either on terms that the original or any subsequent holder thereof shall be bound by the Scheme or in respect of which the holder thereof shall have agreed in writing to be bound by the Scheme, but excluding (A) in the case of references in this document to "Scheme Shares" or "Scheme Shareholders" in relation to the Court Meeting any Excluded Shares in issue at the Voting Record Time in respect of the Court Meeting and any Scheme Shares referred to in (iii) above and (B) in the case of other references in this document to "Scheme Shares" and "Scheme Shareholders" any Excluded Shares in issue at the Reduction Record Time;
"Statement of Capital"	the statement of capital approved by the Court and showing with respect to Fusion IP's share capital, as altered by the Reduction Court Order, the information required by section 649 of the Companies Act;
"Special Resolution"	the special resolution to be proposed at the General Meeting for the purpose of approving the Capital Reduction and certain amendments to the articles of Fusion IP, together with other matters which are necessary for the purposes of implementing the Scheme;
"Takeover Offer"	a takeover offer as defined by section 974 of the Companies Act;
"Third Party"	has the meaning given to paragraph 2.3 of Part A of Appendix I (Conditions and Certain Further Terms of the Acquisition) to this announcement;
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland;
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States and the District of Columbia;
"US Exchange Act"	United States Securities Exchange Act of 1934, as amended;
"US Securities Act"	the United States Securities Act of 1933, as amended; and
"Voting Record Time"	6.00 p.m. on the day which is two days before the date of the Meetings or, if any Meeting is adjourned, 6.00 p.m. on the day which is two days before the date of such adjourned meeting.

Unless otherwise stated, all times referred to in this announcement are references to the time in London.

All references to legislation in this announcement are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

For the purpose of this announcement "subsidiary", "subsidiary undertaking" and "undertaking" have the meanings given by the Companies Act.

References to "£", "Sterling", "p" and "pence" are to the lawful currency of the United Kingdom. References to "$", "US dollars" and "cent" are to the lawful currency of the United States.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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Monday, 3rd June 2024

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