Imperial College incubator Touchstone rejects IP Group's £1.3 billion tie-up

The Imperial College spin-out that turns lab ideas into money-spinners has rejected a possible £1.3 billion merger with a rival universities start-up incubator.

IP Group, which spins inventions out of universities across the UK, revealed it had approached Touchstone Innovations, the AIM-listed firm formerly known as Imperial Innovations, about an all-share tie-up, but had the offer rejected.

IP Group also unveiled plans to raise £200 million in a share placing and open offer and said it would open a business in Australia and New Zealand, revealing deals with nine universities.

IP’s chief executive Alan Aubrey said the merger and launch of the Australian business was a sign of its “global aspiration”.

IP is valued at around £800 million and Touchstone, which was spawned out of Imperial College London, is worth around £500 million. It would be the first deal in IP commercialisation since 2014 when IP Group bought the remaining 80% of Fusion IP for £70 million.

Neil Woodford and Invesco, the fund manager’s old employer, are the top two shareholders of both companies and said they would back a deal.