Oxford Glyco seeks bidders as CAT offer's value falls

David Ebsworth, the chief executive of Oxford GlycoSciences, the biotech group at the centre of a takeover battle, has promised to seek out new bidders for the company, after abandoning an agreement to merge with Cambridge Antibody Technology.

Mr Ebsworth said he was disappointed CAT had so far refused to raise its all-share bid. That has shrunk in value since its announcement in January and now sits at a 17 per cent discount to a cash bid from its rival Celltech.

OGS says the Celltech bid also undervalues the company, but analysts said it is now firm favourite to win control.

Mr Ebsworth, who had already called off a shareholder meeting to vote on the CAT offer this week, formally abandoned his recommendation of the deal yesterday. He will continue to try to persuade CAT's chief executive, Peter Chambré, to raise his group's offer. He said: "I am still hopeful. It might be a difference of tactics, as if this were a marathon. I would like to win it at the first lap and watch the others drop away, but perhaps he prefers to take it with a final burst."

CAT's share price has fallen 23 per cent, reducing its offer to £84m against Celltech's £101m and compared with OGS's own cash pile of £130m. Bankers said it was unlikely CAT would be able to increase its offer unless its shares rose significantly in value.

A bid from the private French firm Immuno-Designed Molecules looked increasingly unlikely last night, but Mr Ebsworth said he was now able to solicit bids from other sources. "Not wishing to blow my own trumpet, I have a rather good network and I know a lot of chief executives of very rich companies, so I have a list of 15 people to call," he said.

OGS shares continued to reflect the market's optimism that Mr Ebsworth will succeed, or at least force Celltech to raise its offer. OGS rose 1.5p to 194p, compared with Celltech's 182p bid.

Celltech was yesterday arguing that a combined CAT-OGS would need to tap shareholders for more cash within three years. But Mr Ebsworth said the CAT offer, which would give shareholders exposure to any recovery in biotech sector valuations, remained the more attractive.