Oxford Glyco turns down higher bid to stick with CAT
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Your support makes all the difference.Oxford GlycoSciences was last night continuing to recommend a controversial £84m all-paper bid from Cambridge Antibody Technology despite having received a cash offer worth 20 per cent more.
Celltech yesterday tabled a hostile offer, which was immediately rejected out of hand by David Ebsworth, the OGS chief executive.
But OGS is believed to be trying to incite a bidding war, and CAT was locked in talks yesterday with its advisers to decide whether it could improve the terms of its own offer.
Mr Ebsworth said he expected the next few days would throw up a "round of bids and re-bids" and that other companies had expressed an interest in looking at the OGS books.
Celltech is offering 182p a share in cash, compared to CAT's offer, which was valued at the close of trading yesterday at 152.2p. Celltech, which has antibody technology to rival CAT and which is the UK's biggest biotech group, says the cost of buying OGS and shutting most of it down could be paid entirely from OGS's £136m cash pile. It believes it would effectively be getting its hands on OGS's library of patented proteins at no cost.
Defending his decision to continue recommending the existing CAT deal, Mr Ebsworth dismissed the Celltech approach as a spoiling tactic. "They are trying to steal the company. They have been talking about the quality of our intellectual property assets, but if they believe that then they should pay for them."
OGS would incur a £1.1m "break fee" if it stopped recommending the CAT deal.
Peter Chambré, the chief executive of CAT, said he would tell OGS shareholders in the coming days that his deal would give them exposure to the long-term fruits of OGS technology. His chances of winning OGS have diminished since 25 January, when the agreed deal was announced, because the CAT share price has fallen 22 per cent. It rose 10.25p to 420.5p yesterday as investors bet it would lose out. OGS was down 5p to 190p, but remains above the cash offer price as market players bet Celltech will be willing to up its offer, perhaps to 200p.
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