AstraZeneca to buy remainder of CAT, but at a 67% premium

AstraZeneca, Europe's third-largest pharmaceutical company, plans to acquire the remaining 80.1% of fellow UK-based Cambridge Antibody Technology that it does not already own. After weekend speculation of an acquisition move, the drug major announced first thing on May 15 that it will offer 1,320 pence a share (equal to $24.96 per American Depository Share) in cash for a total of L567.0 million ($1.03 billion), valuing the whole biotechnology group at some L702.0 million.

The offer represents a premium of 66.9% to CAT's closing share price ahead of the announcement and the company's directors consider this fair and reasonable, saying that they intend to unanimously recommend its acceptance to shareholders.

In 2004, AstraZeneca acquired a 19.9% stake in CAT at a price of 743 pence a share as part of a collaboration and licensing to jointly discover and develop human monoclonal antibodies, with the goal of initiating at least 25 programs during the five-year discovery phase of the alliance (Marketletter November 29, 2004). At that time, the firm said there would be no benefit in taking a controlling interest in CAT.