IPH LIMITED — M&A Activity 2019

Mar 27, 2019

ASX Announcement

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28 March 2019

PROPOSED QANTM-XENITH MERGER CONTINUES TO OFFER COMPELLING VALUE

• Underlying value of QANTM–Xenith merger remains unchanged – Xenith shareholders to own 45% of the merged entity.

• Short-term share price fluctuations do not reflect underlying value of the QANTM business, and have been quoted selectively by IPH.

• Xenith Board continues to recommend the QANTM-Xenith merger in the absence of a Superior Proposal.

QANTM notes the ACCC announcement today that it will not oppose the proposal by IPH to acquire Xenith IP Group Ltd (the IPH Proposal ).

The QANTM Board maintains that the QANTM-Xenith merger represents compelling value, and urges Xenith shareholders to look to the fundamentals of the QANTM proposal.

1. The real, underlying value represented by the QANTM – Xenith merger of equals remains unchanged since the proposed merger was announced.

• The merger of equals is based on a fixed merger ratio which offers Xenith shareholders 45% ownership of a merged QANTM and Xenith business.

• The merger ratio reflects a collaborative and considered assessment of the relative values of the QANTM and Xenith businesses, the synergies likely to be achieved and the future prospects of a combined business.

• QANTM’s positive result for the first half of FY2019 reinforces the value of this merger of equals.

2. Short term share price movements are not the best measure of the value of the QANTM-Xenith merger.

• Short term share prices can be influenced by factors (including speculation) unrelated to the underlying performance and strength of the QANTM and Xenith businesses, and selective use of a closing price at a point in time does not give the fairest indication of value.

• For example, IPH’s ASX announcement on 12 March 2019 selectively used a 15 week old QANTM share price to claim that the IPH Proposal offered a 23% value premium, whereas a comparison based on the previous day’s closing price (11 March 2019) would have indicated that the QANTM merger was valued at $2.03, compared to $1.97 for the IPH Proposal.

• To the extent share price is relevant, a volume weighted average price (VWAP) gives a fairer indication of value, as illustrated below.

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QANTM INTELLECTUAL PROPERTY LIMITED ASX ANNOUNCEMENT

Implied value of consideration for QANTM–Xenith merger	Implied value of consideration for QANTM–Xenith merger	Implied value of consideration for QANTM–Xenith merger	Implied value of consideration for QANTM–Xenith merger
	and IPH Proposal
($/ Xenith share; period ending 27		March 2019)
	1 month	2 month	3 month
	VWAP	VWAP	VWAP
QANTM–Xenith merger	$1.97	$1.96	$1.95
IPH Proposal	$1.98	$1.94	$1.93

3. The rationale for the QANTM-Xenith merger is compelling.

• The merger would create a market leading group of independent IP services businesses in Australia, New Zealand and Asia.

• Xenith and QANTM shareholders would own 45% and 55% respectively of the merged group, and would share in the value upside from increased scale, efficiency and realisation of expected synergies. By contrast, Xenith shareholders would have only around a 5% interest in IPH if the IPH Proposal is eventually put to Xenith shareholders to vote on and is approved.

• QANTM and Xenith are aligned in culture and strategy.

• Xenith has previously announced that there is a risk that the IPH Proposal, as currently framed, may not win support from Xenith principal and employee shareholders, who hold over 40% of Xenith’s shares. IPH would be precluded from voting its 19.9% stake in any scheme meeting relating to the IPH Proposal.

As announced by Xenith today, the scheme meeting for the QANTM-Xenith merger will be postponed to allow Xenith shareholders an opportunity to consider supplementary information relating to recent developments.

The QANTM Board confirms its strong support for the QANTM-Xenith merger, and notes the announcement by Xenith today that the Xenith Board continues to recommend the QANTM-Xenith merger in the absence of a Superior Proposal.

For further information, please contact:

QANTM Intellectual Property Limited

Leon Allen Managing Director and CEO Tel: +61 3 9254 2806 www.qantmip.com

Martin Cleaver

CFO and Company Secretary

Media:

Max Hewett GRACosway on behalf of QANTM Tel: +61 (0) 432 332 215

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QANTM INTELLECTUAL PROPERTY LIMITED ASX ANNOUNCEMENT

About QANTM Intellectual Property

QANTM Intellectual Property Limited (“QANTM” ASX: QIP) is the owner of leading intellectual property (IP) businesses operating in Australia, New Zealand, Singapore and Malaysia under three key brands - Davies Collison Cave, FPA Patent Attorneys and Advanz Fidelis IP Sdn Bhd. With 150 highly qualified professionals and over 270 years’ combined history, the QANTM Group has a strong track record in providing IP services to a broad range of Australian and international clients, ranging from start-up technology businesses to Fortune 500 multinationals, public research institutions and universities. The company also provides services in relation to patents, designs and trademarks and through DCC, a litigation service in relation to patent and trade mark protection.

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