Ann: XIP: ACCC review of proposed Xenith IP and QANTM IP merger, page-2

IPH – Macquarie rates the stock as Upgrade to Outperform from Neutral - 11 March 2019

Macquarie believes IPH is well-positioned in the three-way merger tussle, as the Qantm ((QIP)) merger deal with Xenith ((XIP)) remains subject to a number of hurdles [ACCC approved last Thursday].Importantly, there is the opportunity for a competing proposal should it emerge and Macquarie calculates there is material accretion potential.The broker upgrades to Outperform from Neutral and raises the target to $7.10 from $6.00. The broker factors in earnings upgrades driven by FX and a multiple re-rating, with M&A risk skewed to the upside.

Sector: Commercial & Professional Services.

Target price is $7.10.Current Price is $6.49. Difference: $0.61 – (brackets indicate current price is over target). If IPH meets the Macquarie target it will return approximately 9% (excluding dividends, fees, and charges – negative figures indicate an expected loss).