Celltech plans Oxford Glyco bid to break up £110m CAT merger

Cambridge Antibody Technology, the UK biotechnology company, yesterday said it was pressing ahead with plans to merge with its smaller rival, Oxford GlycoSciences, despite news that Celltech, Britain's biggest biotech group was preparing a rival bid for the Oxford-based company.

CAT, which announced plans for an agreed takeover of OGS last month, said it had received "positive feedback" from the company's shareholders for its proposed £110m all-share offer.

The move came after Celltech emerged as another likely buyer of OGS. Celltech is thought to be close to launching an all-cash offer pitched slightly higher than CAT's all-share bid. The bid could wreck the merger plans of the two smaller companies.

Celltech refused to comment on its plans, but it is believed to have asked its advisers, Cazenove and JP Morgan, to carry out a careful assessment of OGS's business.

Celltech is likely to table its own bid within the next few weeks, before OGS's shareholders vote on the CAT deal at an extraordinary general meeting on 11 March.

If Celltech prevails in the bidding battle, the enlarged company is likely to be run by Goran Ando. Mr Ando, currently the research and development director at Pharmacia, is widely tipped to become Celltech's new chief executive when Peter Fellner moves up to become non-executive chairman next month.

OGS said last month its two largest shareholders, Invesco and Fidelity, which hold a combined 29 per cent, supported CAT's offer. Yesterday it said that deal remained the only one on the table, making it "in the best interest of our shareholders" to press ahead.

The two companies argued when they unveiled their deal on 23 January that their drug discovery technologies would fit well together.

OGS is an expert in proteomics, and as such is able to identify proteins in the human body which may be linked to disease. CAT's expertise is in the identification and manufacture of antibodies, which are formed in the human body to fight disease.

The enlarged group would have seven products in trials on humans and another seven in pre-clinical development.

Both companies would also bring one finished product to the merger. CAT's Humira is a treatment for rheumatoid arthritis which is ready for launch in the US, and OGS's Zavesca treats Gaucher disease, a rare condition in which the body has difficulty breaking down fat.

CAT's offer was well received in the City for its strategic fit but not seen as a generous valuation of OGS, which has a market capitalisation of only £95m but a cash pile of £130m.

The CAT offer values OGS at a 30 per cent discount to its cash pile. Critics have said the deal is also, in effect, a rights issue for CAT, which will have to issue shares in order to complete the purchase.

Celltech, which is also developing an arthritis drug, is set to make £51m of profits this year. Financially, it could outgun CAT and also believes OGS's shareholders will favour the fact that it is offering cash.

OGS' shares have advanced 28 per cent this year, and closed at 172p on Friday.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
techPatent specifies 'anthropomorphic device' to control media devices
Voices
The PM proposed 'commonsense restrictions' on migrant benefits
voicesAndrew Grice: Prime Minister can talk 'one nation Conservatism' but putting it into action will be tougher
News
Ireland will not find out whether gay couples have won the right to marry until Saturday afternoon
news
News
Kim Jong-un's brother Kim Jong-chol
news
News
Manchester city skyline as seen from Oldham above the streets of terraced houses in North West England on 7 April 2015.
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?