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Biotech / Medical : Munch-a-Biotech Today -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (1499)	4/14/2003 6:46:05 PM
From: Icebrg	Read Replies (3) \| Respond to of 3158

Biotech firm falls victim to hostile takeover Simon Bowers Saturday April 12, 2003 The Guardian Oxford GlycoScience, the cash-rich biotechnology firm, yesterday fell on its sword, surrendering to a hostile £102m takeover bid from Celltech that will lead to closure of the business. The move cements the record of Celltech chief executive Peter Fellner's as the sector's foremost deal-broker after a bitter six-week bid battle. OGS had initially dismissed Celltech's offer as "opportunistic, and a bid to acquire OGS on the cheap". Yesterday chief executive David Ebsworth conceded he would be unable to deliver a higher breaking-up price. He also insisted that Celltech's price did "not reflect the intrinsic value of the business and cash in OGS." OGS's cash reserves last year stood at £135m. The loss-making Oxford firm yesterday said all other interest from potential merger partners and rival asset-stripping predators had been exhausted. Yesterday biotech investors Sir Chris Evans and Alan Goodman abandoned plans for a rival £111m hostile bid, backed by WestLB, claiming the Oxford firm's head office would saddle any asset-stripping bid with an unforeseen leasehold liability of more than £10m - though some analysts questioned this figure and claimed the liability was well known. A source close to Sir Chris said a two-week intensive examination of OGS's books by the two entrepreneurs pointed to "a fair break-up value of about £90m." Mr Ebsworth had initially signed up to an all-share merger with fellow loss-maker Cambridge Antibody Technology, but was forced to withdraw his recommendation after CAT share price declines reduced the deal's paper valuation of OGS from £110m to £80m. He finally agreed to throw in the towel and accept Mr Fellner's offer yesterday after Sir Chris's decision to walk away from a deal led to heavy trading in OGS shares, with Celltech ending up with a stake thought to be more than 25%. Shares in OGS closed down 14.5p at 182.5p - about the level of Celltech's offer. The tussle for control of OGS became particularly bitter in January and February when it emerged that a large shareholder, Fidelity, was selling shares in the company despite having signed a non-binding letter backing the merger with CAT. Repeated CAT share sales by Fidelity dominated market sentiment about the company, pushing down CAT's share price and, in turn, reducing the paper value of OGS. Proponents of the merger are thought to have been furious at Fidelity's actions. Merger proposals were dealt a further blow soon afterwards when Amvescap, OGS's largest shareholder which had also given written backing to the combination, sold a stake of more than 10% to Celltech. Yesterday Mr Ebsworth said: "Due to the unfortunate decline of the CAT share price, the absence of any other credible bidders and the sale of significant blocks of shares to Celltech, we feel that the only alternative is for shareholders to accept the current offer by Celltech.