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QANTM board to recommend Adamantem scheme for takeover
Following soaring stock prices and three competing acquisition proposals, listed IP provider QANTM is entering a binding implementation deed with Adamantem, which, if accepted, will see shareholders receive a significant premium for shares.
Lauren Croft
After putting forward an indicative offer in mid-March, Australia-based investment management firm Adamantem is set to acquire all QANTM Intellectual Property Limited (ASX: QIP) shares by scheme of arrangement.
QANTM, which listed on the ASX in 2016, operates in Australia, New Zealand, Singapore, Malaysia, and Hong Kong, with the following brands: Davies Collison Cave, DCC Advanz Malaysia, Davies Collison Cave Law, FPA Patent Attorneys, and Sortify.tm.
As reported in February, QANTM also received a non-binding indicative proposal from UK-based IP firm Rouse International Holdings, an IP firm operating in 12 jurisdictions, which, if accepted, would see Rouse acquire all QANTM’s shares.
In a market announcement this morning (Friday, 10 May), QANTM confirmed it had entered into a binding scheme implementation deed (SID) with Fox BidCo, an entity owned and controlled by Adamantem Capital Management, for the acquisition of all the shares in QANTM.
Under the scheme, which is subject to approval, QANTM shareholders will receive $1.817 per QANTM share with the opportunity to elect to receive either 100 per cent cash (cash consideration) or a mixed consideration of 50 per cent cash, 50 per cent scrip combination, subject to a scrip issuance cap of 24 per cent in BidCo’s holding company.
The cash consideration of $1.817 per share includes a 58 per cent premium to QANTM’s closing price on 26 February – the last trading day before Rouse submitted its indicative proposal. Since January 2024, QANTM’s shares have risen by more than 95 per cent – from $0.95 per share to $1.80.
As part of the scheme, Adamantem has secured voting commitment deeds from various QANTM principals, representing approximately 19 per cent of QANTM shares. These principals, according to the ASX announcement, have elected to receive the mixed consideration.
“The voting commitment deeds may be terminated if there is a superior proposal that BidCo fails to match or exceed or if an independent expert concludes that the scheme is not in the best interests of QANTM shareholders,” QANTM stated in its ASX announcement.
The QANTM board unanimously recommended that QANTM shareholders vote in favour of the scheme – and each QANTM director intends to vote QANTM shares held or controlled by them in favour of the scheme, according to the ASX.
“The QANTM board is unanimous in our view that the Adamantem scheme is in the best interests of QANTM shareholders. In making this assessment, the board has carefully considered a range of matters, including its view of the intrinsic value of QANTM, the certain value proposed by the scheme, the certainty for shareholders of the binding SID which is not subject to due diligence or regulatory approvals and the support for the scheme indicated by our principals,” QANTM chair Sonia Petering said.
“The board notes Adamantem’s future growth plans for QANTM businesses and its intentions to support QANTM’s people to grow QANTM in Australia and internationally, particularly in our target areas of Asia-Pacific.”
The QANTM board is also permitted under the SID to declare and pay a fully franked special dividend of up to $0.071 per QANTM share on or before implementation of the scheme. This amount has been determined based on an assessment by QANTM of its available franking credits and funding.
As reported by the AFR, Thomson Geer currently has a 4.9 per cent stake (approximately $7 million) in QANTM, standing to make a significant profit should the scheme be approved.
On Thursday (9 May), managing partner Adrian Tembel told the AFR that the firm hadn’t decided which way it would vote but that it was “watching with great interest.”
The scheme is subject to a number of conditions, including the approval of QANTM shareholders at a scheme meeting, which is expected to be held in late July. If approved, the acquisition is expected to be implemented in August.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
