OGS to merge with Celltech

The board of Oxford GlycoSciences (OGS) has decided to recommend that the shareholders accept Celltech's £101m (Euro 146m) cash offer for the firm, despite weeks of searching for an alternative partner.

OGS had originally hoped to merge with another UK company Cambridge Antibody Technology (CAT), but the significant fall in the CAT share price, from 540 pence per share on 22 January 2003, the day prior to announcement of the proposed merger with OGS, to 349.5 pence on 10 April 2003, meant that CAT was not in a position to improve its original merger terms.

OGS had also approached a significant number of parties, including large and small biotechnology and pharmaceutical companies, as well as private equity investors, with a view to them making an offer for the company. However, despite conducting detailed discussions with a number of interested groups, none of them decided to pursue their interest.

In a statement the OGS board said: 'While the OGS Board continues to believe that the offer by Celltech does not reflect fully the intrinsic value of the business and cash of OGS, in the absence of any other options for realising value for shareholders in the near term, the board recommends that shareholders accept the offer.'

Commenting, David Ebsworth, ceo of OGS, said: 'Over the past number of months, we have been extremely committed to maximising value for our shareholders and have spoken to a wide variety of potentially interested parties. 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.

'This is the realistic option and we will endeavour to work with Celltech in the interests of our shareholders and employees.'