BUZZ-Touchstone: rises on merger offer from rival IP Group

** Intellectual property incubator Touchstone Innovations rises 5.1 pct after IP Group (LSE: IPO.L - news) says it has made an approach to the firm about a possible combination

** IP Group (-1.3 pct) says Touchstone has rejected the offer and is separately planning a £200 mln capital raise

** Filings show Touchstone's two largest shareholders Invesco Perpetual and Woodford Investment Management both support the deal

** Broker Jefferies says while Touchstone has rejected the offer, a combination would make sense, improving liquidity in both stocks as well as reducing IP Group's reliance on its main investment, Oxford Nanopore

** Both stocks have similar shareholder bases: Touchstone 39 pct owned by Invesco (Frankfurt: 3IW.F - news) , 23.8 pct Woodford, 12.7 Lansdowne Partners (IOB: 0QOQ.IL - news) , according to Reuters data; IP Group 25.9 pct Invesco, 14.2 Woodford, 12.8 pct Lansdowne

** News comes amid troubles for another IP incubator, Allied Minds, that has fallen 70 pct in 2017 after it wrote off a number of investments

** Allied Minds (Other OTC: ALLWF - news) , up 4 pct on Tuesday, is also more than 50 pct owned by the Invesco and Woodford