Oxford Glyco jumps 12% on hopes for a rival bid
Oxford Glycosciences, the biotech company seeking an all-share deal with Cambridge Antibody Technology, could become the subject of a bid battle after it revealed yesterday that "a number of parties, including Celltech" had requested information on its business.
It is understood there have been three or four expressions of interest. Celltech, the UK's biggest biotech company, is considering making a cash offer. Analysts think the US antibody specialist Mederex, with whom OGS already collaborates, could also be interested.
Shares in Oxford Glycosciences rose 12 per cent to 192.5p on the possibility of an auction. CAT's offer now values OGS, whose chief executive is David Ebsworth, at £94m, or 168p a share. This is some way below its target's current market value of £107m as the market bets on a higher offer being made.
Any rival bidder must make its move before 11 March when shareholders are due to vote on the CAT-OGS merger.
Analysts were divided on the likelihood of Celltech entering the fray. Sam Fazeli, an industry analyst at Nomura, said: "The same technology synergy that is proposed for the CAT-OGS merger also exists for Celltech and OGS."
But Emma Palmer, at WestLB Panmure, said a deal could distract Celltech from its existing business, particularly as it is also searching for a new chief executive. "We feel the company may be better served by making product acquisitions," she said.
Celltech declined to comment on its interest in OGS, or on reports its new chief executive will be Goran Ando, the research and development director at Pharmacia.
Dan Mahony, at Morgan Stanley, expressed doubts about the rationale of a Celltech bid. "CAT-OGS makes a lot of sense as it brings expertise in certain areas and more clinical development experts. Celltech already has these things."
Peter Chambre, CAT's chief executive, emphasised that his offer was the only formal one on the table. He said: "OGS brings us a stronger pipeline, is a good research and development fit and gives us more financial power." It would create a company that "could compete with the top tier of biotech companies and give UK investors a second, strong publicly quoted biotech company to choose from," he said.
Celltech shares rose 7p to 338.25p.
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