NEW YORK, Jan. 23-Oxford Glycosciences and Cambridge Antibody Technology will merge, the two companies said today.
In the merger, CAT will subsume OGS. The new company, to be called Cambridge Antibody Technology, plans a cost-cutting "portfolio review" that will "focus R&D expenditure on the highest quality projects," according to a joint statement. It expects to save approximately £10 million in expenses in its first financial year through eliminating "duplicated activities" in corporate overhead, R&D and real estate.
Under the deal, OGS stockholders will receive 0.362 shares of CAT for each share of OGS owned. CAT shareholders will own 64.3 per cent of the new company, and OGS shareholders will own the remainder.
Based on yesterday's CAT closing price of 540 pence, each OGS share will be worth 195.5 pence, a premium of 28.2 percent over yesterday's closing price.
The merger will leave CAT's senior management in charge, including Chief Executive Officer Peter Chambre, Chief Financial Officer John Aston and chair Peter Garland.
OGS chief executive officer David Ebsworth will be asked to join CAT's board as an executive director "to assist in the integration process," according to a statement from the two companies. He plans to remain on the company board as a non-executive director following a portfolio review scheduled to wrap up in November 2003.
OGS Chief Scientific Officer Raj Parekh will be asked to join the CAT board as an executive director during the transition and "portfolio review." He plans to remain on the board as a non-executive director subsequent to that. OGS Chief Medical Officer Chris Moyses and Chief Financial Officer Denis Mulhall will be asked to join CAT's executive committee.
James Hill, currently an OGS non-executive board member, will be asked to join CAT's board as a non-executive director.
The new Cambridge Antibody Technology will have pro forma net cash of £260.1 million as of Dec. 31.
The merger is expected to happen in March 2003.
For further information, see the company statement.