Merlin to launch OGS buyout bid

Merlin Biosciences is in talks with Oxford GlycoSciences, which is currently the subject of a £101m offer from Celltech.

The takeover battle for Oxford GlycoSciences (OGS), the UK-listed biotechnology company, looks set to intensify as a number of international bidders are mulling offers for the £100m company.


Among the interested parties is Merlin Biosciences, the UK-based life sciences private equity firm headed by Sir Christopher Evans. Evans has joined forces with fellow biotech entrepreneur Alan Goodman, head of Avlar Bioventures, to try and trump a £101.4m offer from the UK’s largest biotech company Celltech which was tabled in late February.


In a statement to the London Stock Exchange, OGS confirmed that a further three companies had expressed an interest in the company. “The interested parties comprise an international pharmaceutical company, a US based biotechnology company and a European private equity house.”


Commenting, David Ebsworth, CEO of OGS, said “We have previously promised our shareholders that we will seek the best value that we can for them and in doing so are seeking to have discussions with all interested parties.”


Evans is likely to pitch an offer for OGS at around 200 pence per share, nine per cent above the current Celltech offer. According to the Financial Times, Evans and Goodman, backed by WestLB, will divide OGS components among the 40 biotech companies in their venture funds, spinning off its most valuable units.


The first closing for Celltech’s 182 pence per share offer is scheduled for today, although shareholders have been advised to reject the deal ahead of anticipated improved offers from other interested parties, including British pharmaceuticals company AstraZeneca.


Cambridge Antibody Technology, which commenced the bidding process with a £110m stock offer in January, is thought unlikely to improve its original offer.


Between them, Evans and Goodman manage around £600m in capital. Merlin held a first close on its third biotech venture fund on £125m last year, which is looking to close on £250m later this year.