Celltech wins bid battle for Oxford GlycoSciences

Celltech yesterday secured victory in the bitter battle for control of its biotech sectormate Oxford GlycoSciences.

OGS said it was reluctantly recommending Celltech's £101m cash offer, as other mooted bidders for the cash-rich company melted away. Celltech yesterday bought up large parcels of OGS shares in the market and had amassed a 25 per cent stake even as the OGS board met to decide how to react.

Earlier in the day OGS admitted that three potential bidders trumpeted last month – including the venture capitalist Sir Christopher Evans – had all declined to make offers.

Celltech said it now hoped to clinch majority control of OGS through other share purchases next week. It wants to bring the bid battle – the first in European biotech history – to a speedy conclusion and get its hands on the OGS cash pile of about £120m. This cash is dwindling by an estimated £3m a month, but Celltech calculates that the difference between its offer and the cash pile will be enough to pay for shutting most of OGS down.

Celltech has also already begun talks with Actelion, a Swiss biotech, about selling on some rights to OGS's only existing drug, Zavesca, which counters a genetic disorder affecting the body's ability to break down fat.

Peter Fellner, Celltech's chief executive, said: "We want to bring things to a conclusion, and hope we can bring the timetable forward. There are for us some useful assets in OGS and if we succeed, as looks likely, then we will be getting them for nothing – or, putting it more politely, getting them in a cash neutral way."

The OGS chief executive David Ebsworth, who mounted a frenzied but ultimately fruitless search for an alternative bidder, is likely to leave with a £400,000 pay-off. "We tried our hardest to get people to step up to the plate and put in a higher bid, and I believe the Celltech offer is below the intrinsic value of the company. But our shareholders were already voting with their feet and we have bowed to the inevitable," he said.

Cambridge Antibody Technology, who started the bidding war with an all-share approach in January, could not return with an offer that would better Celltech's, it told OGS yesterday.

And an approach from Sir Christopher and fellow biotech venture capitalist Alan Goodman has also fallen through. They had hoped to distribute OGS's assets among their other companies, but said they were put off by the cost of shutting down OGS's headquarters and making staff redundancies.