OGS presses CAT to improve offer

Oxford GlycoSciences yesterday pressed Cambridge Antibody Technology to improve the terms of its all-share offer after the bid battle for the UK biotech company intensified last week.

OGS also denied last week's stake-building exercise by rival Celltech would derail its plans to merge with CAT.

David Ebsworth, OGS's chief executive, said there was "still everything to play for" in the bid battle. "We remain in active discussions with CAT with a view to obtaining a material improvement in the value of their offer," he said. "In addition we continue to seek further offers from other potentially interested parties."

The company rushed out the statement after Celltech, which has tabled its own £101m cash offer for OGS, bought 10.55 per cent of its shares on Friday. Celltech, Britain's biggest biotech, described the shares as a "blocking stake", which it said would prevent CAT from going through with its paper offer for OGS.

OGS, which specialises in identifying human proteins that might be linked to disease, has been trying to kick-start an auction for its business. Its preferred option is to encourage CAT, whose expertise is in identifying antibodies, to raise its offer after the value fell to £86m.

OGS became alarmed that Celltech's raid on its shares would prompt CAT to walk away because, under takeover rules, it would not be able to forcibly purchase the 10.55 per cent stake.

Mr Ebsworth said OGS and CAT could still come together under a "scheme of arrangement". The process, which has to be approved by the courts, requires 75 per cent of OGS's shareholders to approve the deal.

If the two companies press ahead with this plan, CAT could still buy OGS outright, which would leave Celltech with a stake of about 3.6 per cent in the enlarged entity. Celltech attempted to pour cold water on the plan, saying: "While all this prevarication is going on, OGS's cash continues to haemorrhage."

Celltech believes it is in a strong position because its offer is all in cash, and is 24 per cent higher than the CAT merger.

Some of OGS's shareholders have made it clear that they will not support CAT's offer at current level. Any improvement would be likely to come this week, before shareholders have to make their minds up ahead of the first closing date of Celltech's bid on 31 March.