The market has been wrong footed so many times with this stock. Prior to the IPH takeover announcement this morning, the market wasn't expecting anything, XIP remained at about $1.60. There was no price premium reflected in the price post XIP-QIP merger announcement.
I think a large issue is the lack of liquidity in both XIP and QIP. The average trade volume is so low that any significant trade can cause a major price movement.
Currently XIP is around $1.83, again as you say, reflective of not expecting a higher offer from QIP. QIP's statement doesn't suggest that it will raise its offer predominantly because apparently IPH's calculations are off (not apples vs apples). It is a brave decision for QIP not to raise its offer by the meeting date. The total revenue, EBITDA, cash reserves, geographic reach of an IPH-XIP entity versus QIP is significant and it would be a severe growth inhibitor for QIP in the long run because QIP lacks state of the art systems and processes that IPH possesses which provides an incomparable profit margin to both XIP and QIP. If unsuccessful, QIP could of course later pursue acquisitions of non-listed patent firms and finance with debt, but that would be a lot of catching up to do without any guarantee of success.
Nevertheless, the QIP + XIP merger appears unlikely given the numbers required as I posted earlier. Therefore XIP shareholders will ultimately be left with no choice but to accept IPH's superior offer in the absence of one better.
