23 January 2003
Not for release, publication or distribution in, into or from Australia,
Canada or Japan
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC ("CAT") AND OXFORD GLYCOSCIENCES PLC
("OGS") PROPOSED MERGER OF CAT AND OGS
The Boards of CAT and OGS announce that they have agreed the terms of a
recommended merger to create a leading European biotechnology company
combining the key strengths of the two organisations.
Rationale for the Merger
The Merger will create an enlarged entity with greater scientific,
organisational and financial resources. In particular:
* the Enlarged Group will have a stronger and broader portfolio, with two
approved products, seven additional products in clinical trials and seven
pre-clinical products;
* the Merger will significantly strengthen the Enlarged Group's core
capabilities in research and development by combining CAT's leading human
monoclonal antibody product development expertise with OGS' oncology drug
discovery capabilities and target pool and by increasing the breadth of the
discovery and pre-clinical portfolios;
* the Enlarged Group will have substantially greater financial strength.
This will increase the ability to fund product development to later stages,
thereby retaining greater value, and reduce the need for additional capital.
Pro-forma net cash was 260.1 million GBP as at 31 December 2002; and
* cost savings based on the removal of duplicated activities have been
identified in the areas of corporate overhead, R&D and real estate. These
savings are expected to have a cash effect of approximately 10 million GBP
in the first full financial year following completion of the Merger*. In
addition, further savings are expected from a portfolio review to focus
R&D expenditure on the highest quality projects. The results of this
review will be announced in November 2003.
Terms of the Merger
The Merger of CAT and OGS will be effected by way of a scheme of arrangement
under section 425 of the Companies Act. Upon completion of the Merger, OGS
Shareholders will receive:
for each OGS Share
0.3620 New CAT Shares
Holders of OGS ADSs will receive:
for each OGS ADS
0.3620 New CAT ADSs
* Based upon CAT's share price of 540.0 pence, being the Closing Price of a
CAT Share on 22 January 2003, the last Business Day prior to this announcement,
the Merger values each OGS Share at 195.5 pence, and the entire issued and to
be issued share capital of OGS at approximately 109.6 million GBP. This
represents a premium of 28.2 per cent. over the Closing Price of 152.5 pence
per OGS Share.
* Based on the volume weighted average trading price of CAT Shares in the last
ten Business Days prior to this announcement of 581.7 pence, the Merger values
each OGS Share at 210.6 pence and the entire issued and to be issued share
capital of OGS at approximately 118.2 million GBP. This represents a premium of
43.3 per cent. over the volume weighted average trading price of OGS Shares in
the last ten Business Days prior to this announcement of 147.0 pence per OGS
Share.
* Following completion of the Merger, which is expected to occur in March 2003,
and based on the current issued share capital of each company, CAT Shareholders
will hold approximately 64.3 per cent. and OGS Shareholders will hold
approximately 35.7 per cent. of the issued share capital of CAT.
* CAT has received irrevocable undertakings from those OGS Directors who hold
OGS Shares (other than Dr Drakeman**) representing in aggregate 273,843 OGS
shares, or approximately 0.5 per cent. of the issued share capital of OGS,
under which they have agreed to vote in favour of the resolutions to implement
the Merger.
* CAT has also received non-binding letters of intent to vote in favour of the
resolutions to implement the Merger from Invesco Asset Management Limited and
Fidelity Investments International Limited in respect of a total of 16,021,763
OGS Shares, representing approximately 28.7 per cent. of the issued share
capital of OGS.
* The Merger is subject to the conditions set out in Appendix I, including,
amongst other things, the approval of the Merger by shareholders of both CAT
and OGS, the obtaining of relevant regulatory consents and the sanction of the
Scheme by the Court.
Proposed Board and management team
* Following completion of the Merger, CAT will continue to be chaired by
Professor Peter Garland. Peter Chambre and John Aston will remain Chief
Executive Officer and Chief Financial Officer respectively.
* Dr David Ebsworth, currently Chief Executive Officer of OGS, will be invited
to join the CAT Board as an executive director to assist in the integration
process. It is the intention of both CAT and Dr Ebsworth that, after completion
of that process, he will remain on the CAT Board as a non-executive director.
* Dr David Glover, who will remain as Chief Medical Officer of CAT, will co-
chair the portfolio review of the Enlarged Group with Professor Raj Parekh,
currently Chief Scientific Officer of OGS. Professor Parekh will be invited
to join the CAT Board as an executive director upon completion of the Merger
and it is the intention of both CAT and Professor Parekh that, following the
completion of the portfolio review, he will remain on the CAT Board as a
non-executive director.
* Dr James Hill, currently a non-executive director of OGS, will be invited to
join the CAT Board as a non-executive director.
* Dr Chris Moyses, currently Chief Medical Officer of OGS, and Denis Mulhall,
currently Chief Financial Officer of OGS, will be invited to join the CAT
Executive Committee.
Professor Peter Garland, Chairman of CAT, commented,
"The Merger with OGS is an important step towards CAT's strategic goal of
building a profitable, product-based biopharmaceutical company over the next
five years and laying the foundations for rapid revenue and profit growth
beyond that point. The Merger will significantly strengthen our core
capabilities in therapeutic development, by enhancing our discovery, pre-
clinical and clinical development capabilities, while also adding strength
and breadth to the product portfolio. The Enlarged Group will also enjoy
substantially greater financial strength and greater flexibility in meeting
future funding requirements."
Kirk Raab, Chairman of OGS, commented,
"We have previously stated that one of our strategies was to achieve critical
mass through merger and acquisition opportunities so as to close the gap in
our clinical pipeline. The Merger achieves this, resulting in our
shareholders owning approximately 36 per cent. of the Enlarged Group. This
means they will benefit from the strengthened opportunities for the combined
company."
This summary should be read in conjunction with the full text of the
following announcement about the Merger.
A presentation to analysts is taking place today at 12.30 p.m. at The Brewery,
Chiswell Street, London EC1Y 4SD. Analysts wishing to attend should contact
Graham Herring on +44 20 7067 0700.
Enquiries:
CAT
Peter Chambre
John Aston
Rowena Gardner
Tel: +44 1223 471 471
OGS
David Ebsworth
Denis Mulhall
Tel: +44 1235 208 000
Merrill Lynch
Rupert Hill
Andrew Hayes
Tel: +44 20 7628 1000
Goldman Sachs
Michael Hill
Basil Geoghegan
Tel: +44 20 7774 1000
Cazenove
Tony Brampton
Louise Littlewood
Tel: +44 20 7588 2828
Cazenove
Julian Cazalet
Steve Baldwin
Tel: +44 20 7588 2828
Weber Shandwick Square Mile
Kevin Smith
Graham Herring
Tel: +44 20 7067 0700
Financial Dynamics
Tim Spratt
Melanie Toyne-Sewell
Tel: +44 20 7831 3113
BMC Communications (US Media)
Brad Miles
Tel: +1 212 477 9007 ext.17
Financial Dynamics (US)
Leslie Wolf-Creutzfeldt
Deborah Ardern Jones
Te1: +1 212 850 5626
Trout Group (US Investors)
Dana King
Tel: +1 212 477 9007 ext. 24
* The expected operating cost savings have been calculated on the basis of
the existing cost and operating structures of the companies and by
reference to current prices and the current regulatory environment. These
statements of estimated cost savings and one-off costs for achieving them
relate to future actions and circumstances which, by their nature, involve
risks, uncertainties and other factors. As a result, the cost savings
referred to may not be achieved, or those achieved could be materially
different from those estimated.
** Dr Donald Drakeman, an OGS Director, is also the Chief Executive Officer
of Medarex, a competitor of CAT, and has therefore not participated in
decisions of the OGS Board relating to the Merger. Accordingly, he has
abstained from the recommendation by the OGS Board to OGS Shareholders
and from entering into any undertakings regarding voting in favour of the
resolutions of the OGS Court Meeting and the OGS EGM required to implement
the Merger. All references in this announcement to the unanimous
recommendation of the OGS Board should be read accordingly.
Merrill Lynch is acting for CAT and no one else in connection with the
Merger and will not be responsible to anyone other than CAT for providing
the protections afforded to clients of Merrill Lynch or for providing advice
in relation to the Merger.
Goldman Sachs International is acting for OGS and no one else in connection
with the Merger and will not be responsible to anyone other than OGS for
providing the protections afforded to clients of Goldman Sachs International
or for providing advice in relation to the Merger.
This announcement is not an offer to sell or an invitation to purchase any
securities or the solicitation of any vote or approval in any jurisdiction.
CAT Shareholders and OGS Shareholders are advised to read carefully the
formal merger documentation once it has been despatched.
Appendix III contains the definitions of terms used in this announcement.
Application of the Safe Harbor of the Private Securities Litigation Reform
Act of 1995: This announcement contains statements about CAT and OGS that
are or may be forward looking statements. All statements other than
statements of historical facts included in this announcement may be forward
looking statements. Any statements preceded or followed by or that include
the words "targets", "plans", "believes", "expects", "aims", "intends",
"will", "may", "anticipates" or similar expressions or the negative thereof
are forward-looking statements. Forward-looking statements include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, economic performance, financial condition, dividend
policy, losses and future prospects; (ii) future performance in clinical
trials of the product candidates that were developed using CAT's or OGS'
technology; (iii) the ability of CAT or OGS and their respective
collaborators to commercialise products; (iv) business and management
strategies and the expansion and growth of CAT's or OGS' operations;
(v) the effects of government regulation on CAT's or OGS' business;
(vi) expansion and other development trends of CAT's or OGS' current
and future customers and its industry; (vi) acquisitions, including the
timing, nature, availability, location and significance of those
acquisitions; (vii) costs relating to the integration of the businesses
of CAT and OGS; and (viii) costs savings from the Merger.
These forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of CAT or OGS or industry results, to be
materially different from any future results, performance or achievements
expressed or implied
by such forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding CAT's or OGS' present and future
business strategies and the environment in which CAT and OGS will operate
in the future.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or
distributed should inform themselves about and observe such restrictions.
This announcement is not an offer of New CAT Shares into the United States
and New CAT Shares will not be registered under the Securities Act or any
US State securities laws. CAT intends to issue the New CAT Shares under the
Scheme to OGS Shareholders in reliance upon exemptions from the
registration requirements of the Securities Act and any US State
securities laws and, as a consequence, New CAT Shares to be issued pursuant
to the Scheme will not be registered under such legislation. OGS
Shareholders who are or will be "affiliates" (as such term is defined
under Rule 144 of the Securities Act) of OGS prior to, or of CAT after,
the Effective Date will be subject to certain US transfer restrictions
relating to the New CAT Shares received pursuant to the Scheme.
In addition, no steps have been, or will be, taken to enable the New CAT
Shares to be offered in compliance with the applicable securities laws of
Canada or Japan and no prospectus in relation to the New CAT Shares has
been, or will be, lodged with or registered by the Australian Securities
and Investments Commission. Accordingly, the New CAT Shares may not be
offered, sold, transferred, resold, delivered or distributed, directly
or indirectly, in or into or from Canada, Japan or Australia (except
in transactions exempt from or not subject to the registration
requirements of the relevant securities laws of Canada, Japan or
Australia).
Both CAT and OGS have equity securities traded on the London Stock
Exchange and NASDAQ. The Panel wishes to draw the attention of those
market makers and broker dealers transacting in the securities of CAT
and OGS to certain UK dealing disclosure requirements during the offer
period pertaining to the Merger. The offer period (in accordance with
the City Code, which is published and administered by the Panel)
commenced on 23 January 2003.
The above disclosure requirements are set out in more detail in Rule 8
of the City Code. In particular, Rule 8 requires public disclosure of
dealings during the offer period by persons who own or control, or who
would as a result of any transaction own or control, one per cent. or
more of any class of relevant securities of the offeror or offeree
company. Relevant securities include CAT Shares, CAT ADSs, instruments
convertible into CAT Shares or CAT ADSs, OGS Shares, OGS ADSs and
instruments convertible into OGS Shares or OGS ADSs. This requirement
will apply until the end of the offer period.
Disclosure should be made on an appropriate form by no later than 12
noon London time on the Business Day following the date of the dealing
transaction. These disclosures should be sent to a Regulatory
Information Service.
The Panel requests that those market makers and broker dealers advise
those of their clients who wish to deal in the relevant securities of
CAT or OGS, whether in the United States or in the UK, that they may
be affected by these requirements. If there is any doubt as to their
application, the Panel should be consulted (telephone number:
+44 20 7382 9026, fax number +44 20 7638 1554).
23 January 2003
Not for release, publication or distribution in, into or from
Australia, Canada or Japan
CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC ("CAT") AND OXFORD
GLYCOSCIENCES PLC ("OGS") PROPOSED MERGER OF CAT AND OGS
1. Introduction
The Boards of CAT and OGS announce that they have agreed the terms of
a recommended merger to create a leading European biotechnology
company combining the key strengths of the two organisations.
The sources and bases for the information and the definitions of
certain expressions used in this announcement are set out in Appendix
II and III respectively.
2. Summary of the terms of the Merger
The Merger of CAT and OGS will be effected by way of a scheme of
arrangement under section 425 of the Companies Act. Upon completion
of the Merger, OGS Shareholders will receive:
for each OGS Share
0.3620 New CAT Shares
Holders of OGS ADSs will receive:
for each OGS ADS
0.3620 New CAT ADSs
Based upon CAT's share price of 540.0 pence, being the Closing Price
of a CAT Share on 22 January 2003, the last Business Day prior to this
announcement, the Merger values each OGS Share at 195.5 pence, and
the entire issued and to be issued share capital of OGS at
approximately 109.6 million GBP. This represents a premium of 28.2
per cent. over the Closing Price of 152.5 pence per OGS Share.
Based on the volume weighted average trading price of CAT Shares in
the last ten Business Days prior to this announcement, the Merger
values each OGS Share at 210.6 pence and the entire issued and to be
issued share capital of OGS at approximately 118.2 million GBP. This
represents a premium of 43.3 per cent. over the volume weighted
average trading price of OGS Shares in the last ten Business Days
prior to this announcement of 147.0 pence per OGS Share.
Following completion of the Merger, which is expected to occur in
March 2003, and based on the current issued share capital of each
company, CAT Shareholders will hold approximately 64.3 per cent. and
OGS Shareholders will hold pproximately 35.7 per cent. of the issued
share capital of CAT. The name of CAT will be changed in due course
as part of management's commitment to building a leading
biopharmaceutical company.
The Merger is subject to the conditions set out in Appendix I,
including, amongst other things, the approval of the Merger by
shareholders of both CAT and OGS, the obtaining of relevant
regulatory consents and the sanction of the Scheme by the Court.
3. Background to and reasons for the Merger
CAT has stated that its goals are to complete the transition to a
profitable, product-based biopharmaceutical company over the next
five years and to build a broad portfolio of products that will
deliver rapid revenue and profit growth beyond that point through
a combination of internal development and acquisition.
OGS has stated that its goals are to focus on key objectives
including cost reductions and to build critical mass and strengthen
its clinical pipeline through appropriate transactions.
The Merger helps both companies to achieve their stated goals by
creating an enlarged entity with significantly strengthened
discovery and development capabilities and financial resources with
which to build its pipeline. In particular:
* the Enlarged Group will have a stronger and broader portfolio,
with two approved products, seven additional products in clinical
trials and seven pre-clinical products. These are set out below:
Product/Candidate
Partner
Disease
Phase
HumiraTM
Abbott
Rheumatoid arthritis(1)
Approved in US; filed for approval in Europe
Juvenile rheumatoid arthritis
Phase III
Crohn's disease
Phase II/III
ZavescaTM
Actelion/Teva
Type I Gaucher disease(2)
Approved in Europe; filed in Israel and an amended application to
be filed in the US CAT-152
Scarring post glaucoma surgery
Phase III
CAT-192
Genzyme
Scleroderma
Phase I/II
CAT-213
Allergic disorders
Phase I/II
J695
Abbott/Wyeth
Rheumatoid arthritis
Phase II
Crohn's disease
Phase II
LymphoStat-BTM
HGSI
Systemic lupus erythematosus
Phase I
TRAIL-R1 mAb
HGSI
Cancer
Phase I
OGT 923
Glycolipid disorders
Phase I
GC1008
Genzyme
Fibrotic diseases
Pre-clinical
OGT 2378
Cancer
Pre-clinical
TRAIL-R2 mAb
HGSI
Cancer
Pre-clinical
MDX-OGS 001
Medarex
Cancer
Pre-clinical
Undisclosed
Wyeth
Undisclosed
Pre-clinical
Undisclosed
HGSI
Undisclosed
Pre-clinical
Undisclosed
Undisclosed
Undisclosed
Pre-clinical
(1) Also in development for psoriasis, psoriatic arthropathy
and ankylosing spondylitis
(2) Also in development for Niemann-Pick Type C, Late-Onset
Tay Sachs and Type III Gaucher disease
* the Merger will significantly strengthen the Enlarged Group's
core capabilities in R&D by combining CAT's leading human monoclonal
antibody product development expertise with OGS' oncology drug
discovery capabilities and target pool and by increasing the breadth
of the discovery and pre-clinical portfolios. The Enlarged Group
will also have both antibody and small molecule discovery
capabilities, as well as significantly improved scale in product
development resulting from the combination of each company's
strengths in pre-clinical, clinical and regulatory activities. The
Enlarged Group will benefit from OGS' demonstrated ability to drive
products through to approval;
* the Enlarged Group will have substantially greater financial
strength. This will increase its ability to fund product development
to later stages, thereby retaining greater value, and reduce the
need for additional capital. Pro-forma net cash was 260.1 million
GBP as at 31 December 2002; and
* cost savings based on the removal of duplicated activities have
been identified in the areas of corporate overhead, R&D and real
estate. These savings are expected to have a cash effect of a
pproximately 10 million GBP in the first full financial year
following completion of the Merger*. In addition, further savings
are expected from a portfolio review to focus R&D expenditure on
the highest quality projects. The results of this review will
be announced in November 2003.
4. Management and employees
Following completion of the Merger, CAT will continue to be chaired
by Professor Peter Garland. Peter Chambre and John Aston will remain
Chief Executive Officer and Chief Financial Officer, respectively.
Dr David Ebsworth, currently Chief Executive Officer of OGS, will be
invited to join the CAT Board as an executive director to assist in
the integration process. It is the intention of both CAT and Dr
Ebsworth that, after completion of that process, he will remain on
the CAT Board as a non-executive director.
Dr David Glover, who will remain as Chief Medical Officer of CAT,
will co-chair the portfolio review of the Enlarged Group with
Professor Raj Parekh, currently Chief Scientific Officer of OGS.
Professor Parekh will be invited to join the CAT Board as an
executive director upon completion of the Merger and it is the
intention of both CAT and Professor Parekh that, following the
completion of the portfolio review, he will remain on the CAT
Board as a non-executive director.
Dr James Hill, currently a non-executive director of OGS, will be
invited to join the CAT Board as a non-executive director.
Dr Chris Moyses, currently Chief Medical Officer of OGS, and Denis
Mulhall, currently Chief Financial Officer of OGS, will be invited
to join the CAT Executive Committee.
Dr Kevin Johnson, CAT's Chief Technology Officer, will leave the CAT
Board on completion of the Merger. He will continue to lead the effort
to secure independent financing for the business of patient
stratification based on antibody arrays.
It is expected that two of CAT's existing non-executive directors
will step down from the Board by the end of 2003.
The CAT Board confirms that the existing contractual employment
rights, including pension rights, of the employees of both the
CAT Group and the OGS Group will be fully safeguarded following
completion of the Merger.
Certain OGS Directors are entitled to compensation on termination
of or leaving employment following the Effective Date.
Following completion of the Merger, appropriate proposals will be
made to participants in the OGS Share Option Schemes to allow the
offer of new options over CAT Shares in exchange for the release of
existing options over OGS Shares, where practicable.
5. OGS Shareholder support
CAT has received irrevocable undertakings from those OGS Directors
who hold OGS Shares (other than Dr Drakeman**) representing in
aggregate 273,843 OGS Shares, or approximately 0.5 per cent. of
the issued share capital of OGS, under which they have agreed to
vote in favour of the resolutions to implement the Merger.
CAT has also received non-binding letters of intent to vote in favour
of the resolutions to implement the Merger from Invesco Asset
Management Limited and Fidelity Investments International Limited,
in respect of a total of 16,021,763 OGS Shares representing
approximately 28.7 per cent. of the issued share capital of OGS.
Neither CAT, nor any of the CAT Directors, nor so far as CAT is
aware, any party acting in concert with CAT, owns or controls any
OGS Shares or holds options to purchase any OGS Shares or has entered
into any derivative referenced to OGS Shares which remains
outstanding.
6. Information on CAT
CAT is a UK-based biotechnology company with advanced technology for
rapidly isolating human monoclonal antibodies using phage display
systems. CAT has created libraries of over 100 billion distinct phage
antibodies and applies its proprietary technologies to the discovery
and development of human monoclonal antibodies as new treatments for
human disease.
CAT has a respected research discovery group, with five products in
pre-clinical development, 15 products in discovery and a strong
intellectual property position.
CAT's goals are to complete the transition to a profitable, product-
based biopharmaceutical company over the next five years and to build
a broad portfolio of products that will deliver rapid revenue and
profit growth beyond that point. It is intended that these goals will
be achieved through the continued strengthening of CAT's product
portfolio to create long-term product revenues, balanced with short-
term revenues resulting from research collaborations and licensing of
its technologies.
HumiraTM, the most advanced CAT-derived human monoclonal antibody,
isolated and optimised in collaboration with Abbott Laboratories,
has been approved by the FDA for marketing in the US as a treatment
for rheumatoid arthritis and was filed by Abbott for approval for
marketing in Europe in April 2002. Approval is expected by Abbott
in the first half of 2003. Humira is now being developed by Abbott
for five further indications. Six further CAT-derived human
therapeutic antibodies are at various stages of clinical trials.
CAT has a number of alliances in place with established
pharmaceutical and biotechnology companies. Present partners include
Abbott Laboratories, Amgen, Chugai, Genzyme, Human Genome Sciences,
Merck, Pharmacia and Wyeth Research.
CAT completed its initial public offering and listing on the London
Stock Exchange in March 1997, raising 41 million GBP. In April 2000,
CAT raised 93 million GBP in a secondary offering. In June 2001,
CAT's ADSs commenced trading on NASDAQ.
For the year ended 30 September 2002, CAT reported a loss before
taxation of 31.8 GBP million on turnover of approximately 9.5 million
GBP. CAT had net assets at that date of approximately 135.8 million
GBP, with net cash and liquid resources of approximately 129.8 million
GBP. Based upon CAT's share price of 540.0 pence, being the Closing
Price of a CAT Share on 22 January 2003, the last Business Day prior
to this announcement, CAT's market capitalisation was approximately
196.3 million GBP.
7. Information on OGS
OGS is a research and product development company with three distinct
business units - Inherited Storage Disorders, proteomics and oncology.
In ISD, its most advanced product is ZavescaTM, which has been approved
by the European Commission for the treatment of mild to moderate Type
I Gaucher disease in patients for whom enzyme replacement therapy is
unsuitable. Under the terms of a marketing and distribution agreement,
Actelion will market Zavesca worldwide with the exception of Israel.
European launch is expected in March 2003. An amended New Drug
Application is expected to be filed with the FDA in the first quarter
of 2003.
In Israel Zavesca will be marketed by Teva, who filed for approval in
January 2003. Zavesca is also undergoing further clinical
investigations in other glycosphineal storage disorders. Another ISD
compound is OGT 923, which has entered Phase I clinical trials.
OGS has a leading proteomics business which has several collaborations
with partners including Bayer, GSK, Pfizer, Pioneer Hi-Bred/DuPont and
Wyeth. In addition it has a joint venture, Confirmant Limited, to
develop the protein atlas of the human genome. OGS receives royalties
for licensing its intellectual property in proteomics.
In oncology, OGS is developing a pipeline of projects and has drug
discovery and development alliances with Medarex and BioInvent and a
drug discovery alliance with NeoGenesis. OGS currently has five
discovery projects in oncology.
OGS has stated that its goals are to focus on key objectives including
cost reductions and to build critical mass and strengthen the clinical
pipeline through appropriate transactions.
OGS completed its initial public offering and listing on the London
Stock Exchange in April 1998, raising approximately 27.8 million GBP.
In March 2000, OGS raised approximately 32.9 million GBP and in
December raised a further 157.4 million GBP in secondary offerings.
In December 2000, the OGS ADSs commenced trading on NASDAQ.
For the year ended 31 December 2001, OGS reported a loss before
taxation of 28.2 million GBP on turnover of approximately 13.4 million
GBP. OGS had net assets as at that date of approximately 194.6 million
GBP, with net cash of approximately 176.6 million GBP. On the basis of
the Closing Price of an OGS Share of 152.5 pence on 22 January 2003,
the last Business Day prior to this announcement, OGS' market
capitalisation was approximately 85.0 million GBP.
8. Current trading of CAT and OGS and prospects for the Enlarged
Group
CAT's current trading
Recurring revenues, representing contract research revenues and income
from licensing arrangements entered in to prior to the current financial
year are expected to be in the range of 3 million GBP to 4 million GBP
for the 2003 financial year. Additional revenues may arise from technical
and clinical milestone payments and any further licensing or contract
research arrangements including extensions to existing arrangements.
Cash receipts from collaborators and licensees in the 2003 financial
year are expected to be at least comparable to the 2002 financial year.
On 31 December 2002, Abbott Laboratories announced that it had received
FDA approval to market Humira for the treatment of rheumatoid arthritis
in the US. This approval was received earlier than had been expected and
Abbott has stated that it began supplying Humira to pharmacies throughout
the US in January 2003. The European Agency for the Evaluation of
Medicinal Products ("EMEA") accepted Abbott's submission for Humira for
the treatment of rheumatoid arthritis in April 2002, and approval is
expected by Abbott in mid-2003. Humira was developed in a collaboration
between Abbott and CAT, under which CAT will receive milestone payments
based upon approval in the US and Europe and royalties based on Humira
sales.
Significant increases in operating costs are expected during the current
financial year as compared with the 2002 financial year. This reflects,
in particular, an increase in spending on clinical trials on CAT's
pipeline of product candidates.
In December 2002, CAT settled patent disputes with MorphoSys and Crucell
and announced a cross-licensing arrangement with Xoma. In January 2003,
CAT announced an expanded licence agreement with Dyax.
As at 31 December 2002, CAT had net cash and liquid resources of
approximately 123.7 million GBP, representing 340.2 pence per CAT
ordinary share in issue.
OGS' current trading
In September 2002, OGS announced a reorganisation of its operations
and a cost reduction programme. In light of the delays in the approval
of Zavesca in the US, the Bridgewater, New Jersey facility was closed.
OGS also carried out a review of its UK operations which resulted in
redundancies, restructuring and the streamlining of some existing
alliances. As from 1 January 2003, OGS has been reorganised into
three separate business units; ISD, proteomics and oncology, with the
intention of increasing transparency, responsibility and accountability.
In November 2002, OGS announced that the European Commission had
granted marketingauthorisation for Zavesca, an oral treatment for
patients with mild to moderate Type I Gaucher disease for whom enzyme
replacement therapy is unsuitable. The existing European marketing
agreement with Actelion for Zavesca was also extendedto cover the rest
of the world, excluding Israel. Zavesca is expected to be launched in
Europe in March 2003. In January 2003, Zavesca was filed for approval
in Israel by Teva, which has rights to the drug in Israel. Following
recent discussions with the FDA, OGS and Actelion intend to submit an
amendment to the New Drug Application for Zavesca in the first quarter
of 2003. In addition to the US, Actelion intends to file for
registration of Zavesca in Japan and will evaluate opportunities in
other territories, as appropriate.
OGS has also commenced a Phase I study with OGT 923, bringing a second
iminosugar into clinical development for glycosphingolipid storage
disorders.
As at 31 December 2002, OGS had net cash of approximately 136.4 million
GBP, representing 244.8 pence per OGS ordinary share in issue.
Prospects for the Enlarged Group
Cost savings based on the removal of duplicated activities have been
identified in the areas of corporate overhead, R&D and real estate.
These savings are expected to have a cash effect of approximately 10
million GBP in the first full financial year following completion of
the Merger*. In addition, further savings are expected from a portfolio
review to focus R&D expenditure on the highest quality projects. The
results of this review will be announced in November 2003. One-off
costs relating to the integration of CAT and OGS are expected to be
up to 6 million GBP. Management intends to continue OGS' business
unit strategy in respect of proteomics and ISD.
9. Further details of the Merger
The Merger is to be implemented by way of a scheme of arrangement to
be effected by OGS under section 425 of the Companies Act and is subject
to the conditions set out in Appendix I, including, amongst other things,
the approval of the Merger by shareholders of both CAT and OGS, the
obtaining of relevant regulatory consents and the sanction of the Scheme
by the Court.
It is proposed that, under the Scheme, OGS Shareholders who are on
the register of OGS and holders of OGS ADSs at the Scheme Record Time
will receive 0.3620 New CAT Shares for each OGS Share and 0.3620 New
CAT ADSs for each OGS ADS.
Fractional entitlements to New CAT Shares will be aggregated and sold
in the market with the net proceeds distributed pro rata to OGS
Shareholders. Fractional entitlements to New CAT ADSs will be dealt
with in accordance with the applicable depositary arrangements. CAT
Shareholders will retain their shares in CAT. The New CAT Shares and New
CAT ADSs to be issued to OGS Shareholders and holders of OGS ADSs
pursuant to the Merger will be issued credited as fully paid and will
rank pari passu in all respects with the Existing CAT Shares and
existing CAT ADSs, including the right to receive all dividends,
distributions and other entitlements declared, made or paid by CAT on
such shares on or after the date of this announcement.
The Scheme will require approval by OGS Shareholders at the OGS Court
Meeting and by CAT Shareholders at the CAT EGM. The approval required
at the OGS Court Meeting is a majority in number of the shareholders
who vote at the meeting representing 75 per cent. of the shares voted
at the meeting. The Scheme also requires the sanction of the Court and
approval separately by a special resolution of the OGS Shareholders to
be proposed at the OGS EGM.
Once the necessary approvals have been obtained from the CAT
Shareholders and the OGS Shareholders and the relevant conditions have
been satisfied or waived, the Scheme will become effective upon the
delivery to the Registrar of Companies of a copy of the Order. This
is expected to occur in March 2003.
It is intended that the formal documentation relating to the Merger
will be despatched to CAT Shareholders, holders of CAT ADSs, OGS
Shareholders and holders of OGS ADSs and the OGS Court Meeting,
OGS EGM and CAT EGM will be convened, as soon as practicable.
This documentation, which will include listing particulars of CAT
relating to the New CAT Shares, the notices of the CAT EGM and the
OGS EGM and full details of the Scheme, will specify the necessary
actions to be taken by CAT Shareholders, holders of CAT ADSs, OGS
Shareholders and holders of OGS ADSs.
10. United States shareholders
This announcement is not an offer of New CAT Shares into the United
States and New CAT Shares will not be registered under the Securities
Act or any US State securities laws. CAT intends to issue the New CAT
Shares under the Scheme to OGS Shareholders in reliance upon
exemptions from the registration requirements of the Securities Act
and any US State securities laws and, as a consequence, New CAT
Shares to be issued pursuant to the Scheme will not be registered
under such legislation. OGS Shareholders who are or will be
"affiliates" (as such term is defined under Rule 144 of the Securities
Act) of OGS prior to, or of AT after, the Effective Date will be subject
to certain US transfer restrictions relating to the New CAT Shares
received pursuant to the Scheme.
11. Settlement, listing and dealing
Application will be made to the UK Listing Authority for the New CAT
Shares to be admitted to the Official List and to the London Stock
Exchange for such shares to be admitted to trading on the London Stock
Exchange's market for listed securities. It is expected that Admission
will become effective and that dealings for normal settlement will
commence on the Effective Date. CAT will seek to have the New CAT ADSs
to be issued in connection with the Merger quoted on NASDAQ as from the
Effective Date. It is expected that the Scheme will become effective
in March 2003.
A request will be made to the UK Listing Authority to cancel the
listing of the OGS Shares on the Official List and to the London
Stock Exchange to cancel the admission to trading of the OGS Shares
on the London Stock Exchange's market for listed securities. OGS Shares
will cease to be listed on the Official List on the Effective Date.
The last day of dealing in OGS Shares on the London Stock Exchange will
be the last dealing day before the Effective Date. An application to
cancel the quotation of OGS ADSs on NASDAQ and a filing with the SEC
to de-register OGS ADSs will be made shortly after the Effective Date.
Certificates for New CAT Shares to be held in certificated form will be
despatched no later than 14 days after the Effective Date. No
certificates for New CAT Shares will be issued in respect of the
entitlements of OGS Shareholders who hold their shares in CREST,
settlement for which will be made through the applicable CREST
procedures.
Further details on settlement, listing and dealing will be included
in the documentation to be sent to CAT Shareholders, OGS Shareholders,
holders of CAT ADSs and holders of OGS ADSs.
12. Inducement fee agreement and merger agreement
CAT and OGS have entered into an inducement fee agreement under which
each party has agreed to pay the other an amount of approximately 1.1
million GBP by way of compensation if the Merger lapses: (i) following
a failure by its shareholders to pass any resolution required to
implement the Merger; or (ii) if the relevant party's Board fails to
recommend or withdraws or modifies its recommendation of the Merger or
fails to take any steps which are necessary to implement the Merger.
CAT and OGS have also entered into a merger agreement which provides
that both parties will use their reasonable endeavours to achieve the
satisfaction of the conditions set out in paragraph 1 of Appendix I and
to meet the timetable or implementation of the Scheme which has been
agreed between the parties.
Further details on the inducement fee agreement and the merger agreement
will be provided in the formal documentation to be sent to CAT
Shareholders, holders of CAT ADSs, OGS Shareholders and holders of OGS
ADSs.
13. Recommendations and undertakings
The CAT Directors, who have received financial advice from Merrill Lynch,
consider the terms of the Merger to be fair and reasonable to CAT. In
providing its advice Merrill Lynch has relied on the CAT Directors'
commercial assessments of the Merger.
Furthermore, the CAT Directors consider the Merger to be in the best
interests of CAT Shareholders taken as a whole and, accordingly, the
CAT Directors intend unanimously to recommend that CAT Shareholders
vote in favour of the resolutions to be proposed at the CAT EGM, as
they intend to do in respect of their own beneficial holdings of, in
aggregate, 192,155 CAT Shares, representing approximately 0.5 per cent
of the current issued ordinary share capital of CAT.
The OGS Directors (other than Dr Drakeman**), who have been so advised
by Goldman Sachs, consider the terms of the Merger to be fair and
reasonable. In providing its advice to the OGS Directors, Goldman Sachs
has taken into account the OGS Directors' commercial assessments of the
Merger. The OGS Directors believe that the terms of the Merger are in
the best interests of OGS Shareholders taken as a whole and intend to
recommend that OGS Shareholders vote in favour of the resolutions
relating to the Merger to be proposed at the OGS Court Meeting and at
the OGS EGM, as they have undertaken to do in respect of their own
beneficial holdings of, in aggregate, 273,843 OGS Shares, representing
approximately 0.5 per cent. of OGS' existing issued share capital.
14. General
The formal documentation setting out the details of the Merger and the
Scheme will be despatched to CAT Shareholders, OGS Shareholders, holders
of CAT ADSs and holders of OGS ADSs in due course. The circulars to
respective shareholders will include the notices convening the OGS Court
Meeting, the OGS EGM and the CAT EGM.
Enquiries:
CAT
Peter Chambre
John Aston
Rowena Gardner
Tel: +44 1223 471 471
OGS
David Ebsworth
Denis Mulhall
Tel: +44 1235 208 000
Merrill Lynch
Rupert Hill
Andrew Hayes
Tel: +44 20 7628 1000
Goldman Sachs
Michael Hill
Basil Geoghegan
Tel: +44 20 7774 1000
Cazenove
Tony Brampton
Louise Littlewood
Tel: +44 20 7588 2828
Cazenove
Julian Cazalet
Steve Baldwin
Tel: +44 20 7588 2828
Weber Shandwick Square Mile
Kevin Smith
Graham Herring
Tel: +44 20 7067 0700
Financial Dynamics
Tim Spratt
Melanie Toyne-Sewell
Tel: +44 20 7831 3113
BMC Communications (US Media)
Brad Miles
Tel: +1 212 477 9007 ext.17
Financial Dynamics (US)
Leslie Wolf-Creutzfeldt
Deborah Ardern Jones
Te1: +1 212 850 5626
Trout Group (US Investors)
Dana King
Tel: +1 212 477 9007 ext. 24
* The expected operating cost savings have been calculated on the basis
of the existing cost and operating structures of the companies and by
reference to current prices and the current regulatory environment.
These statements of estimated cost savings and one-off costs for achieving
them relate to future actions and circumstances which, by their nature,
involve risks, uncertainties and other factors. As a result, the cost
savings referred to may not be achieved, or those achieved could be
materially different from those estimated.
** Dr Donald Drakeman, an OGS Director, is also the Chief Executive
Officer of Medarex, a competitor of CAT, and has therefore not
participated in decisions of the OGS Board relating to the Merger.
Accordingly, he has abstained from the recommendation by the OGS Board
to OGS Shareholders and from entering into any undertakings regarding
voting in favour of the resolutions of the OGS Court Meeting and the
OGS EGM required to implement the Merger. All references inthis
announcement to the unanimous recommendation of the OGS Board should be
read accordingly.
Merrill Lynch is acting for CAT and no one else in connection with the
Merger and will not be responsible to anyone other than CAT for providing
the protections afforded to clients of Merrill Lynch or for providing
advice in relation to the Merger.
Goldman Sachs International is acting for OGS and no one else in
connection with the Merger and will not be responsible to anyone other
than OGS for providing the protections afforded to clients of Goldman
Sachs International or for providing advice in relation to the Merger.
This announcement is not an offer to sell or an invitation to purchase
any securities or the solicitation of any vote or approval in any
jurisdiction. CAT Shareholders and OGS Shareholders are advised to
read carefully the formal merger documentation once it has been
despatched.
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995: This announcement contains statements about CAT
and OGS that are or may be forward looking statements. All statements
other than statements of historical facts included in this announcement
may be forward looking statements. Any statements preceded or followed
by or that include the words "targets", "plans", "believes", "expects",
"aims", "intends", "will", "may", "anticipates" or similar expressions
or the negative thereof are forward-looking statements. Forward-looking
statements include statements relating to the following: (i) future
capital expenditures, expenses, revenues, economic performance, financial
condition, dividend policy, losses and future prospects; (ii) future
performance in clinical trials of the product candidates that were
developed using CAT's or OGS' technology; (iii) the ability of CAT or
OGS and their respective collaborators to commercialise products; (iv)
business and management strategies and the expansion and growth of CAT's
or OGS' operations; (v) the effects of government regulation on CAT's or
OGS' business; (vi) expansion and other development trends of CAT's or
OGS' current and future customers and its industry; (vi) acquisitions,
including the timing, nature, availability, location and significance of
those acquisitions; (vii) costs relating to the integration of the
businesses of CAT and OGS; and (viii) costs savings from the Merger.
These forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of CAT or OGS or industry results, to be materially different
from any future results, performance or achievements expressed or implied
by such forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding CAT's or OGS' present and future
business strategies and the environment in which CAT and OGS will operate
in the future.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in any such
jurisdictions into which this announcement is released, published or
distributed should inform themselves about and observe such restrictions.
This announcement is not an offer of New CAT Shares into the United States
and New CAT Shares will not be registered under the Securities Act or any US
State securities laws. CAT intends to issue the New CAT Shares under the
Scheme to OGS Shareholders in reliance upon exemptions from the registration
requirements of the Securities Act and any US State securities laws and,
as a consequence, New CAT Shares to be issued pursuant to the Scheme will not
be registered under such legislation. OGS Shareholders who are or will be
"affiliates" (as such term is defined under Rule 144 of the Securities Act)
of OGS prior to, or of CAT after, the Effective Date will be subject to
certain US transfer restrictions relating to the New CAT Shares received
pursuant to the Scheme.
In addition, no steps have been, or will be, taken to enable the New CAT
Shares to be offered in compliance with the applicable securities laws of
Canada or Japan and no prospectus in relation to the New CAT Shares has been,
or will be, lodged with or registered by the Australian Securities and
Investments Commission. Accordingly, the New CAT Shares may not be offered,
sold, transferred, resold, delivered or distributed, directly or indirectly,
in or into or from Canada, Japan or Australia (except in transactions exempt
from or not subject to the registration requirements of the relevant
securities laws of Canada, Japan or Australia).
Both CAT and OGS have equity securities traded on the London Stock Exchange
and NASDAQ. The Panel wishes to draw the attention of those market makers
and broker dealers transacting in the securities of CAT and OGS to certain
UK dealing disclosure requirements during the offer period pertaining to
the Merger. The offer period (in accordance with the City Code, which is
published and administered by the Panel) commenced on 23 January 2003.
The above disclosure requirements are set out in more detail in Rule 8 of
the City Code. In particular, Rule 8 requires public disclosure of dealings
during the offer period by persons who own or control, or who would as a
result of any transaction own or control, one per cent. or more of any class
of relevant securities of the offeror or offeree company. Relevant securities
include CAT Shares, CAT ADSs, instruments convertible into CAT Shares or CAT
ADSs, OGS Shares, OGS ADSs and instruments convertible into OGS Shares or OGS
ADSs. This requirement will apply until the end of the offer period.
Disclosure should be made on an appropriate form by no later than 12 noon
London time on the Business Day following the date of the dealing transaction.
These disclosures should be sent to a Regulatory Information Service.
The Panel requests that those market makers and broker dealers advise those
of their clients who wish to deal in the relevant securities of CAT or OGS,
whether in the United States or in the UK, that they may be affected by
these requirements. If there is any doubt as to their application, the Panel
should be consulted (telephone number: +44 20 7382 9026, fax number +44 20
7638 1554).
APPENDIX I
Conditions to the implementation of the Scheme and the Merger
The Merger will be conditional upon the Scheme becoming unconditional and
becoming effective by not later than 30 April 2003 or such later date (if
any) as OGS and CAT may agree and the Court may allow.
1.
Conditions of the Scheme
The Scheme will be conditional upon:
(a)
the approval by a majority in number representing three-fourths in value of
the holders of OGS Shares present and voting, either in person or by proxy,
at the OGS Court Meeting;
(b)
any resolution or resolutions required to approve and implement the Scheme
being passed at the OGS EGM;
(c)
any resolution or resolutions of CAT Shareholders required in connection with
the approval of the Merger and implementation of the Scheme being passed at
the CAT EGM;
(d)
the admission to the Official List of the New CAT Shares becoming effective in
accordance with the Listing Rules and the admission of such shares to the
London Stock Exchange's market for listed securities becoming effective or
(if CAT and OGS so determine and subject to the consent of the Panel) the UK
Listing Authority agreeing or confirming its decision to admit such shares to
the Official List and the London Stock Exchange agreeing to admit such shares
to trading subject only to (i) the allotment of such shares and/or (ii) the
Scheme becoming unconditional in all respects (other than in respect of this
paragraph 1(d)); and
(e)
the sanction (with or without modification) of the Scheme and confirmation of
the reduction of capital involved by the Court, an office copy of the Order
being delivered for registration to the Registrar of Companies in England and
Wales and registration of the Order confirming the reduction of capital
involved in the Scheme with the Registrar of Companies in England and Wales.
2.
Conditions of the Merger
CAT and OGS have agreed that, subject as stated in paragraph 3 below, the
Merger will also be conditional upon, and, accordingly, the necessary action
to make the Scheme effective will not be taken unless the following
conditions are satisfied or waived as referred to below prior to the Scheme
being sanctioned by the Court:
(a)
the Office of Fair Trading indicating in terms reasonably satisfactory to
CAT and OGS that it is not the intention of the Secretary of State for
Trade and Industry to refer the Merger or any matters arising therefrom
to the Competition Commission;
(b)
all authorisations necessary or reasonably considered by CAT and OGS to be
material in the context of the Merger for or in respect of the Merger and
the implementation of the Scheme having been obtained, in terms and in a
form reasonably satisfactory to CAT and OGS and, where the withdrawal of
any such authorisations would, in the opinion of both of CAT and OGS
(acting reasonably), have a material adverse effect on the Enlarged
Group, the Merger or the implementation of the Scheme, these remaining
in full force and effect, and no intimation of an intention to revoke or
not renew any of these having been received, and all necessary
notifications, filings and applications (including such notifications,
filings and applications as may be required to national or supranational
merger authorities) having been made and all applicable waiting and other
time periods (including any extensions thereof) under any applicable
legislation or regulation of any jurisdiction having expired, lapsed or
been terminated (as appropriate) and all necessary statutory and
regulatory obligations in connection with the Merger and the
implementation of the Scheme in any jurisdiction having been complied
with;
(c)
no relevant authority having taken, instituted, implemented or threatened
(and there not continuing to be outstanding) any action, proceeding, suit,
investigation, enquiry or reference or having enacted, made or proposed
any statute, regulation or order, or taken any other step that would or
might in any respect be material to the OGS Group or the CAT Group to:
(i)
require, prevent or delay the divestiture or alter the terms envisaged for
any proposed divestiture by any member of the Wider OGS Group or the Wider
CAT Group of all or any portion of their respective businesses, assets
(including shares) or properties; or
(ii)
(other than in relation to matters fairly disclosed by OGS to CAT regarding
the OGS Group or by CAT to OGS regarding the CAT Group prior to 23 January
2003) require any member of either the Wider CAT Group or the Wider OGS
Group to ubscribe for or acquire, or to make an offer to acquire any shares
or other ecurities in any member of either the Wider CAT Group or the Wider
OGS Group owned by any third party; or
(iii)
(other than in relation to matters fairly disclosed by OGS to CAT regarding
the OGS Group or by CAT to OGS regarding the CAT Group prior to 23 January
2003) impose any limitation on the ability of any member of the Wider OGS
Group or the Wider CAT Group to conduct their respective businesses or to
own or control their respective assets or properties; or
(iv)
make the Merger or the Scheme or its implementation illegal, void or
unenforceable in or under the laws of any jurisdiction or otherwise
materially restrict, delay or interfere with the Merger or the Scheme or
require material amendment to the terms of the Merger or the Scheme;
(d)
other than as fairly disclosed by OGS to CAT regarding the OGS Group or
by CAT to OGS regarding the CAT Group prior to 23 January 2003, there
being no provision of any arrangement, agreement, licence or other
instrument to which any member of the Wider OGS Group or the Wider CAT
Group is a party or by or to which any member of the Wider OGS Group or
the Wider CAT Group may be bound or is subject which would or might in
the opinion of CAT and OGS (acting reasonably) result, to an extent which
is material in the context of the OGS Group or the CAT Group, in:
(i)
any moneys borrowed or other indebtedness or liabilities actual or
contingent of any member of the Wider OGS Group or the Wider CAT Group
being or becoming repayable or capable of being declared repayable prior
to their stated maturity date; or
(ii)
any such arrangement, agreement, licence or instrument being terminated
or modified, or any adverse effect arising thereunder; or
(iii)
the interests of CAT or OGS or any member of the Wider OGS Group or the
Wider CAT Group with any other person, firm, company or body being
terminated, modified or affected; or
(iv)
any asset, property or interest of, or any asset the use of which is
enjoyed by, any member of the Wider OGS Group or the Wider CAT Group
being or falling to be disposed of, or charged in any manner whatsoever,
or ceasing to be available to any member of the Wider OGS Group, or the
Wider CAT Group or any right arising under which any such asset, property
or interest could be required to be disposed of, or could cease to be
available to any member of the Wider OGS Group or the Wider CAT Group
otherwise than in the ordinary course of business; or
(v)
the creation or assumption of any liabilities (whether actual, contingent
or prospective) by any member of the Wider OGS Group or the Wider CAT
Group; or
(vi)
the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property, assets or
interests of any member of the Wider OGS Group or the Wider CAT Group or
any such mortgage, charge or other security interest (wherever created,
arising or having arisen) becoming enforceable; or
(vii)
the financial or trading position or the value of any member of the Wider
OGS Group or the Wider CAT Group being prejudiced or adversely affected;
or
(viii)
any member of the Wider OGS Group or the Wider CAT Group being required
to acquire any shares in any member of the Wider OGS Group or the Wider
CAT Group owned by any third party,
in each case in consequence of the Merger or the Scheme, and no event
having occurred which, under any provision of any such arrangement,
agreement, licence, permit, franchise or other instrument, could reasonably
be expected to result in any of the events or circumstances which are
referred to in paragraphs (i) to (viii) of this paragraph 2(d), in each
case in consequence of the Merger or the Scheme;
(e)
CAT not having discovered regarding OGS, and OGS not having discovered
regarding CAT that:
(i)
any adverse financial, business or other information in relation to
circumstances existing prior to 23 January 2003 and which is material
in the context of the relevant group has not been publicly disclosed by
the relevant group or otherwise fairly disclosed prior to such date (in
the case of such information regarding CAT) by CAT to OGS and (in the
case of such information regarding OGS) by OGS to CAT; or
(ii)
any financial, business or other information which has been publicly
disclosed at any time by any member of the relevant group or otherwise
fairly disclosed prior to 23 January 2003 (in the case of such information
regarding CAT) by CAT to OGS and (in the case of such information regarding
OGS) by OGS to CAT is misleading or contains any misrepresentation of fact
or omits to state a fact necessary to make the information contained
therein complete and not misleading, and which in any such case is adverse
and material in the context of the relevant group; or
(iii)
any member of the relevant group is subject to any liability (contingent
or otherwise) which has not been disclosed or reflected in the last
published audited consolidated accounts of its group or publicly disclosed
pursuant to the Listing Rules or otherwise prior to 23 January 2003 or
otherwise fairly disclosed prior to such date by OGS to CAT and which is
material in the context of the OGS Group or by CAT to OGS and which is
material in the context of the CAT Group;
(f)
(i)
unless publicly announced by CAT pursuant to the Listing Rules or otherwise
prior to 23 January 2003 or otherwise fairly disclosed by CAT to OGS prior
to such date no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider CAT Group is a party
(whether as plaintiff or defendant or otherwise), in each case which is
material and adverse in the context of the CAT Group, having been
instituted or threatened or remaining outstanding; or
(ii)
since 30 September 2002, being the date to which the latest audited report
and accounts of CAT were made up, and unless publicly announced by CAT
pursuant to the Listing Rules or otherwise publicly announced by CAT prior
to 23 January 2003 or otherwise fairly disclosed prior to such date by CAT
to OGS, there having been no material adverse change in the business,
financial or trading position of the CAT Group;
(g)
(i)
unless publicly announced by OGS pursuant to the Listing Rules or otherwise
prior to 23 January 2003 or otherwise fairly disclosed by OGS to CAT prior
to such date, no litigation, arbitration proceedings, prosecution or other
legal proceedings to which any member of the Wider OGS Group is a party
(whether as plaintiff or defendant or otherwise), in each case which is
material and adverse in the context of the OGS Group, having been
instituted or threatened or remaining outstanding; or
(ii)
since 31 December 2001, being the date to which the latest audited report
and accounts of OGS were made up, and unless publicly announced by OGS
pursuant to the Listing Rules or otherwise prior to 23 January 2003 or
otherwise fairly disclosed prior to such date by OGS to CAT, there having
been no material adverse change in the business, financial or trading
position of the OGS Group;
(h)
other than as publicly announced by CAT or OGS pursuant to the Listing Rules
or otherwise prior to 23 January 2003 or as contemplated by the Scheme or
as otherwise fairly disclosed prior to such date by CAT to OGS regarding the
CAT Group or by OGS to CAT regarding the OGS Group, no member of the CAT
Group, since 30 September 2002, and no member of the OGS Group, since 31
December 2001, being the dates to which the respective latest audited report
and accounts of CAT and OGS were made up, having:
(i)
issued or agreed to issue, or authorised or proposed the issue, of additional
shares of any class, or securities convertible into, or rights, warrants or
options to subscribe for or acquire, any such shares or convertible securities
("Securities") (save as between CAT and OGS respectively and their respective
wholly-owned subsidiaries or for options granted, and any shares in CAT or
OGS respectively issued upon exercise of options granted prior to 23 January
2003, under or pursuant to the CAT Share Schemes or the OGS Share Option
Schemes or as agreed between CAT or OGS from time to time and save, in the
case of CAT, for the issue of Securities representing or convertible into
ordinary shares in CAT which are issued in connection with or relate to any
commercial agreement with a third party and which do not exceed, in aggregate,
5 per cent. of CAT's current issued share capital) or redeemed, purchased,
repaid or reduced any part of its shares or other securities (or agreed to do
so) to an extent which (save in the case of any such issue, authorisation,
proposal, redemption, purchase or reduction by CAT or OGS respectively) is
material in the context of the CAT Group or OGS Group, as the case may be;
or
(ii)
except for:
(a)
transactions between one wholly-owned member of the relevant group and
another such member;
(b)
(in the case of OGS) the Scheme; and
(c)
(in the case of CAT) the disposal of the business of patient stratification
based on antibody arrays,
authorised or proposed or announced its intention to propose any merger or
any changein its share or loan capital or (other than in the ordinary course
of business) any acquisition or disposal of assets or shares which is
material in the context of the CAT Group or OGS Group, as the case may be;
or
(iii)
(other than transactions between one wholly-owned member of the relevant
group and another such member and, in the case of CAT, the disposal of the
business of patient stratification based on antibody arrays) entered into
or varied any contract, transaction or commitment (whether in respect of
capital expenditure or otherwise) (or agreed to do so) which is of a long
term or unusual or onerous nature and which is material in the context of
the CAT Group or OGS Group, as the case may be, or which involves or could
involve an obligation of a nature or magnitude which is material in the
context of the CAT Group or OGS Group, as the case may be; or
(iv)
issued or proposed the issue of any debentures or, save in the ordinary
course of business, incurred or increased (or agreed to incur or increase)
any indebtedness or contingent liability of an aggregate amount which might
materially and adversely affect the CAT Group or OGS Group, as the case may
be; or
(v)
(in the case of CAT or OGS only) recommended, declared, made or paid, or
proposed the declaration, paying or making of any dividend, bonus or other
distribution whether payable in cash or otherwise; or
(vi)
entered into or varied or made any offer (which remains open for acceptance)
to enter into or vary the terms of, any contract, agreement or arrangement
with any of the directors or senior executives of any member of the relevant
group which would be material in the context of the OGS Group or the CAT
Group, as the case may be; or
(vii)
(other than transactions between any wholly-owned member of the OGS Group
and another such member and other than pursuant to the Scheme or the Merger),
entered into, implemented, effected, authorised, proposed or announced its
intention to enter into, implement, effect or authorise any merger, demerger,
reconstruction, amalgamation, scheme, commitment or other transaction or
arrangement in respect of itself or another member of the OGS Group which
would be material in the context of the OGS Group; or
(viii)
(other than transactions between any wholly-owned member of the CAT Group
and another such member and other than pursuant to the Scheme or the Merger),
entered into, implemented, effected, authorised, proposed or announced its
intention to enter into, implement, effect or authorise any merger, demerger,
reconstruction, amalgamation, scheme, commitment or other transaction or
arrangement in respect of itself or another member of the CAT Group which
would be material in the context of the CAT Group; or
(ix)
taken any corporate action or had any legal proceedings instituted or
threatened against it or petition presented or order made for its winding up
(voluntarily or otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, trustee
or similar officer of all or any material part of its assets and revenues
or any analogous proceedings in any jurisdiction or appointed any analogous
person in any jurisdiction; or
(x)
been unable, or admitted in writing that it is unable, to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of
its debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business; or
(xi)
waived or compromised any claim other than in the ordinary course of business
which waiver or compromise is material in the context of the OGS Group or the
CAT Group, as the case may be; or
(xii)
(in the case of CAT or OGS only) made any alteration to its memorandum or
articles of association which would be material in the context of the OGS
Group or the CAT Group, as the case may be; or
(xiii)
entered into any contract, agreement, commitment or arrangement or passed
any resolution or made any offer (which remains open for acceptance) or
proposed or announced any intention with respect to any of the transactions,
matters or events referred to in this paragraph (h);
(i)
CAT not having discovered regarding OGS, and OGS not having discovered
regarding CAT:
(i)
that, save as fairly disclosed to CAT by OGS regarding the OGS Group or to
OGS by CAT regarding the CAT Group prior to 23 January 2003, any past or
present member of the relevant group has not complied with any applicable
legislation or regulations of any jurisdiction with regard to the use,
treatment, handling, storage, transport, release, disposal, discharge,
spillage, leak or emission of any waste or hazardous substance reasonably
or any substance likely to impair the environment or harm human health, or
otherwise relating to environmental matters or the health and safety of any
person or that there has otherwise been any such use, treatment, handling,
storage, transport, release, disposal, discharge, pillage, leak or emission
(whether or not this constituted a non-compliance by any person with any
legislation or regulations and wherever the same may have taken place)
which, in any case, would be reasonably likely to give rise to any
liability (whether actual or contingent) or cost on the part of any member
of the relevant group which would be material in the context of the
relevant group; or
(ii)
that save as fairly disclosed to CAT by OGS regarding the OGS Group or to
OGS by CAT regarding the CAT Group prior to 23 January 2003, there is, or
is reasonably likely to be, any liability (whether actual or contingent)
to make good, repair, reinstate or clean up any property now or previously
owned, occupied or made use of by any past or present member of the relevant
group or any other property or any controlled waters under any environmental
legislation, regulation, notice, circular, order or other lawful requirement
of any relevant authority or otherwise which would be material in the context
of the relevant group; or
(iii)
that, save as fairly disclosed to CAT by OGS regarding the OGS Group or to
OGS by CAT regarding the CAT Group prior to 23 January 2003, circumstances
exist whereby a person or class of persons is proposing to bring a claim in
respect of any product or process of manufacture or materials used therein
now or previously manufactured, sold or carried out by any past or present
member of the relevant group which would be material and adverse in the
context of the relevant group.
For the purpose of these conditions:
(a)
"authorisations" means authorisations, orders, grants, recognitions,
determinations, certificates, confirmations, consents, licences, clearances,
permissions, advices and approvals; and
(b)
"relevant authority" means any central bank, government, government
department or governmental, quasi governmental, supranational, statutory,
regulatory or investigative body, court, stock exchange, trade agency,
association, institution or professional or environmental body or any
other similar person or body whatsoever in any relevant jurisdiction.
3.
Subject to paragraph 4 below, CAT and OGS, acting together, may waive all
or any of the conditions contained in paragraphs 2(a), (b), (c) and (d).
CAT reserves the right (but shall be under no obligation) to waive all or
any of the conditions contained in paragraph 2(g) above, and in paragraphs
2(e), (h) and (i) above (in so far as they relate to OGS), in whole or in
part, and OGS reserves the right (but shall be under no obligation) to waive
all or any of the conditions in paragraph 2(f) above, and in paragraphs 2(e),
(h) and (i) above (in so far as the relate to CAT), in whole or in part, for
the purposes of the Merger and the Scheme.
4.
OGS shall only be entitled to invoke a condition in circumstances where it
would be able to invoke the condition if it were an offeror for CAT in an
offer governed by the City Code.
5.
Save with the consent of the Panel, the Merger will lapse and the Scheme
will not proceed if, before the date of the OGS Court Meeting, there is a
reference to the Competition Commission.
APPENDIX II
Bases and sources of information
1. General
Unless otherwise stated, financial information on CAT and OGS and their
respective groups has been extracted without material adjustment from the
published audited annual report and accounts and, where appropriate, interim
statements of the relevant group for the relevant period.
2. Net cash of CAT and OGS
The amount of net cash and liquid resources of CAT and OGS as at 31 December
2002 of 123.7 million GBP and 136.4 million GBP respectively has been taken
from internal management information of CAT and OGS respectively.
3. Share capital of CAT
References to the issued share capital of CAT are to its issued share capital
as at 22 January 2003 of 36,352,686 shares.
4. Share capital of OGS
References to the issued share capital of OGS are to its issued share capital
as at 22 January 2003 of 55,729,534 shares.
References to the issued and to be issued share capital of OGS are to
56,082,073 OGS Shares as at 22 January 2003 at a price of 195.5 pence per OGS
Share, and where based on the volume weighted average trading price, to
56,151,126 OGS Shares at a price of 210.6 pence.
5. Volume weighted average trading prices
The volume weighted average trading prices of CAT Shares and OGS Shares in
the last ten Business Days prior to this announcement have been sourced from
Bloomberg.
APPENDIX III
Definitions
"Abbott Laboratories" or "Abbott"
Abbott GmbH & Co. KG.
"Actelion"
Actelion Pharmaceuticals Ltd.
"Admission"
the admission of the New CAT Shares to the Official List becoming effective
in accordance with the Listing Rules and the admission of such shares to the
London Stock Exchange's market for listed securities becoming effective.
"ADR"
an American depositary receipt.
"ADS"
an American depositary share.
"Amgen"
Amgen Inc.
"Australia"
the Commonwealth of Australia, its states, territories and possessions and
all areas subject to its jurisdiction or any political sub-division thereof.
"Bayer"
Bayer AG.
"Board"
the board of directors of CAT or OGS, as the context requires.
"Business Day"
a day (not being a Saturday or Sunday) when banks generally are open in the
City of London for the transaction of general banking business, other than
for the settlement of the Euro.
"Canada"
Canada, its provinces, territories and possessions and all areas subject to
its jurisdiction or any political subdivision thereof.
"CAT"
Cambridge Antibody Technology Group plc.
"CAT ADSs"
ADSs of CAT, each of which represents one Existing CAT Share.
"CAT Board"
the board of directors of CAT.
"CAT Directors"
the directors of CAT.
"CAT EGM"
the extraordinary general meeting of CAT to be convened to consider any
resolutions to approve and implement the Merger, including any adjournment
thereof."CAT Group"
CAT and its subsidiary undertakings.
"CAT Shareholders"
the holders of Existing CAT Shares.
"CAT Shares"
the Existing CAT Shares and the New CAT Shares.
"CAT Share Schemes"
the CAT Share Option Scheme, the CAT Unapproved Share Option Scheme, the CAT
Executive Share Option Scheme, the CAT Company Share Option Plan, the CAT
Group plc, Inland Revenue Approved Share Ownership Plan and the proposed CAT
Group Executive Incentive Plan.
"certificated" or "in certificated form"
where a share or other security is not in uncertificated form.
"Chugai"
Chugai Pharmaceutical Co., Ltd.
"City Code"
the City Code on Takeovers and Mergers.
"Closing Price"
the closing price of the relevant share as derived from the Daily Official
List."Companies Act"
the Companies Act 1985.
"Court"
the High Court of Justice in England and Wales.
"CREST"
the computerised settlement system to facilitate the transfer of title to
shares in uncertificated form, operated by CRESTCo.
"CRESTCo"
CRESTCo Limited.
"Crucell"
Crucell Holland BV.
"Daily Official List"
the Daily Official List of the London Stock Exchange.
"DuPont"
E. I. DuPont de Nemours & Co.
"Dyax"
Dyax Corporation.
"Effective Date"
the date on which the Scheme becomes effective and the Merger completes.
"Enlarged Group"
CAT and its subsidiary undertakings following completion of the Merger.
"Existing CAT Shares"
the existing unconditionally allotted or issued and fully paid ordinary
shares of 10 pence each in CAT and any further such shares which are
unconditionally allotted or issued (including pursuant to the exercise of
options under the CAT Share Schemes) before the Effective Date.
"FDA"
the US Food and Drug Administration.
"Genzyme"
Genzyme Corporation.
"GLSD"
Glycolipid Storage Disorders.
"Goldman Sachs"
Goldman Sachs International.
"Group"
the CAT Group or the OGS Group, as the context requires.
"GSK"
GlaxoSmithKline plc.
"Human Genome Sciences" or "HGSI"
Human Genome Sciences, Inc.
"ISD"
Inherited Storage Disorders.
"Japan"
Japan, its cities, prefectures, territories and possessions.
"Listing Rules"
the Listing Rules of the UK Listing Authority.
"London Stock Exchange"
the London Stock Exchange plc or its successor(s).
"Merck"
Merck & Co., Inc.
"Merger"
the proposed merger of OGS with CAT, to be effected by way of the Scheme.
"Merrill Lynch"
Merrill Lynch International.
"MorphoSys"
MorphoSys AG.
"NASDAQ"
the NASDAQ Stock Market, Inc.
"New CAT ADSs"
the CAT ADSs proposed to be issued credited as fully paid pursuant to the
Merger, each of which represents one New CAT Share.
"New CAT Shares"
the ordinary shares of 10 pence each in the capital of CAT proposed to be
issued, credited as fully paid pursuant to the Scheme and the Merger.
"Official List"
the Official List of the UK Listing Authority.
"OGS"
Oxford GlycoSciences Plc.
"OGS ADSs"
the ADSs of OGS, each of which represents one OGS Share.
"OGS Court Meeting"
the meeting of OGS Shareholders to be convened by order of the Court
pursuant to section 425 of the Companies Act to consider and, if thought fit,
approve the Scheme, including any adjournment thereof.
"OGS Directors"
the directors of OGS.
"OGS EGM"
the extraordinary general meeting of OGS to be convened to consider any
resolutions to approve and implement the Scheme and the Merger, including
any adjournment thereof."OGS Group"
OGS and its subsidiary undertakings.
"OGS Shareholders"
the holders of OGS Shares.
"OGS Shares"
the existing unconditionally allotted or issued and fully paid ordinary
shares of 5p each in OGS and any further such shares which are
unconditionally allotted or issued (including pursuant to the exercise
of options under the OGS Share Option Schemes) before the Effective Date.
"OGS Share Option Schemes"
the Oxford GlycoSciences Executive Share Option Scheme, the Oxford
GlycoSciences Sharesave Scheme, the Oxford GlycoSystems Plc 1994 Share
Option Scheme and the Oxford GlycoSystems Limited 1989 Share Option
Scheme."Order"
the order of the Court sanctioning the Scheme under section 425 of the
Companies Act and confirming the reduction of capital of OGS pursuant to
the Scheme under section 137 of the Companies Act.
"Panel"
the Panel on Takeovers and Mergers.
"Pfizer"
Pfizer, Inc.
"Pharmacia"
Pharmacia P-L Biochemicals, Inc.
"Pioneer Hi-Bred"
Pioneer Hi-Bred International, Inc.
"R&D"
research and development.
"Scheme"
the proposed scheme of arrangement under section 425 of the Companies
Act between OGS and the OGS Shareholders (details of which are set out
in paragraph 9 of this announcement) to give effect to the Merger, with,
or subject to, any modification, addition or condition approved or imposed
by the Court and agreed by CAT and OGS."Scheme Record Time"
6.00 p.m. on the last Business Day before the Effective Date.
"SEC"
the US Securities and Exchange Commission.
"Securities Act"
the US Securities Act of 1933, as amended.
"Substantial Interest"
a direct or indirect interest in 20 per cent. or more of the voting equity
capital of an undertaking.
"Teva"
Teva Pharmaceuticals Industries Limited.
"uncertificated" or "in uncertificated form"
recorded on the relevant register of the share or security concerned as
being in uncertificated form in CREST and title to which may be transferred
by means of CREST.
"United Kingdom" or "UK"
the United Kingdom of Great Britain and Northern Ireland.
"UK Listing Authority"
the Financial Services Authority acting in its capacity as the competent
authority for the purposes of Part VI of the Financial Services and Markets
Act 2000."United States" or "US"
the United States of America, its territories and possessions, any state of
theUnited States of America and the District of Columbia and all other areas
subject to its jurisdiction and any political subdivision thereof.
"Wider CAT Group"
CAT and the subsidiaries and subsidiary undertakings of CAT and associated
undertakings, including any joint venture, partnership, firm or company in
which any member of the CAT Group is interested or any undertaking in which
CAT and such undertakings (aggregating their interests) have a Substantial
Interest."Wider OGS Group"
OGS and the subsidiaries and subsidiary undertakings of OGS and associated
undertakings, including any joint venture, partnership, firm or company in
which any member of the OGS Group is interested or any undertaking in which
OGS and such undertakings (aggregating their interests) have a Substantial
Interest."Wyeth Research" or "Wyeth"
Wyeth Ayerst Research, a division of Wyeth Pharmaceuticals, Inc.
"Xoma"
Xoma Technology Limited and Xoma Ireland Limited.
For the purposes of this announcement, subsidiary, subsidiary undertaking,
undertaking and associated undertaking have the meanings given by the
Companies Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule
4A of the Companies Act).
END