Newspaper article The Evening Standard (London, England)

Biotech Bidding Battle Shock as Two Shy Away; Market Report

Newspaper article The Evening Standard (London, England)

Biotech Bidding Battle Shock as Two Shy Away; Market Report

Article excerpt

Byline: MALCOLM WITHERS

SHAREHOLDERS in Oxford GlycoSciences were left shell-shocked today as Sir Christopher Evans of Merlin Biosciences and Alan Goodman of Avlar shied away from making an offer for the biotech company.

After due diligence, the venture capitalists have concluded that their projected 200p-a-share offer "is not a viable proposition".

Having been engaged in Britain's first bid battle in the sector, OGS shareholders were left with two choices, neither of which is favoured by management. Either they accept an all-paper offer from Cambridge Antibody Technology worth pound sterling70 million, or the Celltech all-cash offer that values OGS at pound sterling101 million.

Shares in OGS promptly slumped 14 1/2p to 182 1/2p, which is exactly the level of the offer made by Celltech. At stake is the rapidly diminishing pound sterling130 million cash pile at OGS.

Meanwhile, the market was even having doubts today about the advisability of Celltech proceeding as the OGS cash burn is going on at a phenomenal rate.

Celltech is also in the middle of a change of chief executive. Dr Peter Fellner is leaving and being replaced by Goran Ando.

Celltech shares slipped 2p to 282p as doubts emerged about the ethos of their bid. The bid battle was started by Cambridge Antibody Technology, which made an all-share agreed, but later rejected, offer for OGS.

CAT shares were unchanged today at 349 1/2p.

London shares avoided a fourth consecutive day of falls with a FTSE 100 gain of 21.6 points at 3824.9 although confidence remained fragile with share volumes almost as bad as yesterday. Some 600 million shares were traded.

ICI staged a rare rally, up 5 3/4p to 113 1/4p on hopes that Swiss flavours and fragrances maker Givaudan will bid for its troubled Dutch Quest division. …

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