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Recommended Cash Offer For Celltech Group PLC (CLL) By UCB S.A.; 1.53 Billion Pounds ($2.71 Billion)



10/19/2005 5:11:23 PM

LONDON, May 18 /PRNewswire-FirstCall/ -- PART ONE OF TWO Summary -- The boards of UCB S.A. ("UCB") and Celltech Group plc ("Celltech" or the "Company") announce that they have agreed the terms of a recommended cash offer by UCB for the entire issued and to be issued share capital of Celltech either in the form of Celltech Shares or Celltech ADSs.

-- The Celltech Board, which has been so advised by Morgan Stanley & Co. Limited ("Morgan Stanley") and J.P. Morgan plc ("JPMorgan"), considers the terms of the offer (the "Offer") to be fair and reasonable. In providing advice to the Celltech Board, Morgan Stanley and JPMorgan have taken into account the commercial assessments of the Celltech Board. Accordingly, the Celltech Board unanimously intends to recommend that Celltech Shareholders accept the Offer.

-- The Offer for each Celltech Share will be 550 pence in cash and the Offer for each Celltech ADS will be 1,100 pence, equivalent to $19.44, in cash. The Offer will value the existing issued share capital of Celltech at approximately 1,530 million pounds.

-- The Offer will represent a premium of approximately:

-- 27.8 per cent. to the middle-market closing price of 430.5 pence per Celltech Share on 17 May 2004, the last business day prior to the date of this announcement;

-- 26.3 per cent. to the average middle-market closing price of 435.6 pence per Celltech Share during the three months prior to 17 May 2004; and

-- 44.7 per cent. to the average middle-market closing price of 380.1 pence per Celltech Share during the twelve months prior to 17 May 2004.

-- UCB will finance the acquisition through bank loans. It is expected that the transaction will be earnings accretive, post synergies and before goodwill and other intangibles amortisation, after the second full year.

-- Directors of Celltech and certain members of their immediate families have irrevocably undertaken to accept the Offer in respect of the Celltech Shares that they beneficially own and control, representing approximately 0.18 per cent. of the existing issued share capital of Celltech.

-- UCB, headquartered in Brussels, had a turnover of approximately euro 3 billion in 2003 and employs over 11,500 people. Its flagship pharmaceutical business had a turnover of euro 1.5 billion and an EBIT of euro 397 million in 2003. Its pharmaceutical research activities employ over 1,000 people and have a budget of euro 244 million for 2004.

-- Celltech is a leading UK based biotech company which employs some 1,900 people and had turnover in excess of 350 million pounds in 2003. Its investment in R&D activity, which employs some 450 people, amounted to 106 million pounds in 2003. Operating profit pre exceptional items and goodwill amounted to approximately 50 million pounds in 2003. Celltech has a broad and innovative pipeline including a major new product in advanced phase III trials (CDP870) for which UCB has entered into a worldwide license agreement. The license agreement is not conditional upon the success of the proposed Offer for Celltech by UCB.

-- The combination of UCB and Celltech will create a European based company which will be one of the largest biopharmaceutical companies in the world. In a number of important areas the combined group will benefit from a high degree of complementarity:

-- Complementary product offerings: the combined group will have strong positions in specialty therapeutic areas such as Central Nervous System (Epilepsy, Multiple Sclerosis, Parkinson's Disease, etc.), Inflammation (Respiratory, Rheumatology, Gastro-Enterology) and Oncology;

-- Strengthened research and development: the combined group will benefit from Celltech's innovative expertise in biotechnological R&D, especially monoclonal antibodies, and UCB's expertise in pharmaceutical chemistry. This will result in a significantly strengthened combination of small and large molecule discovery and development expertise allowing the combined group to increase the flow of drug development candidates;

-- Stronger and broader commercial operations (US, Europe and Asia): the combined group will be better positioned, through its enhanced global presence, to commercialise and launch new products, particularly in the specialist areas in which the combination will focus and where UCB has already demonstrated its ability to launch and propel products successfully to market leadership (e.g., Keppra); and

-- The blending of skills and culture, through the successful combination of competencies at all levels of the combined entity, will accelerate innovation and profitable growth.

-- A Loan Note Alternative will also be made available to Celltech Shareholders other than certain Overseas Celltech Shareholders.

Commenting on the Offer, Dr. Peter Fellner, Chairman of Celltech, said:

"Since listing in 1993, Celltech has successfully established itself as one of Europe's leading biotechnology companies built on a platform of internationally respected research and excellent people. UCB recognises these strengths and this offer represents fair value for Celltech Shareholders."

Commenting on the Offer, Baron Georges Jacobs, Chairman of the Executive Committee of UCB, said:

"We have pursued and implemented over the last few years an ambitious plan to develop the company in pharmaceuticals, including through external growth. I am therefore very pleased to announce this transaction which represents a major step in the implementation of our goals, as well as a unique opportunity to build a leading innovative biopharmaceutical company."

Commenting on the Offer, Dr. Goeran Ando, CEO of Celltech said:

"Celltech possesses unique and outstanding UK based research capabilities which UCB has committed to making a cornerstone of the combined group's growth strategy. Together, we will be one of the world's largest biopharmaceutical companies."

Commenting on the Offer, Roch Doliveux, CEO of UCB Pharma said:

"I am looking forward to working with Celltech's excellent management and fine scientific teams to transform Celltech's and UCB's very promising pipeline into commercial value for our shareholders. The new combined entity has all that it takes to rapidly be positioned as a global leader in Neurology, especially with Keppra and its successors, in Inflammation with CDP870, and in Allergy with Xyzal and Zyrtec, with a strong research engine focused on validated targets to fuel our long term growth."

Lazard & Co., Limited ("Lazard") is acting as exclusive financial adviser to UCB in relation to the Offer. Morgan Stanley and JPMorgan are acting as financial advisers to Celltech in relation to the Offer. Lazard Freres & Co. LLC is acting as dealer manager for the Offer in the United States.

In connection with the Offer, Panmure Gordon, a division of Lazard is acting as broker to UCB.

This summary should be read in conjunction with the full text of the following announcement. Appendix III to the following announcement contains definitions of certain terms used in this summary and the following announcement.

There will be a conference call for US investors at 11:30EDT/16:30 BST today hosted by Peter Allen, Deputy CEO of Celltech. The dial-in numbers are: international +44 20 7162 0195 and toll-free +1 888 222 0364.

Interviews with Georges Jacobs, Chairman of the Executive Committee of UCB, Dr. Roch Doliveux, CEO of UCB Pharma, and Dr. Goeran Ando, CEO of Celltech, are available on http://www.cantos.com/ and http://www.celltechgroup.com/.

PRESS ENQUIRIES: UCB Tel: +32 (2) 559 92 99 Roch Doliveux Laurence Battaille Lazard (Financial adviser to UCB) London Tel: +44 (0)20 7187 2000 William Rucker David Gluckman Will Thompson New York Tel: +1 (212) 632 6000 Stephen Sands Jason Bernhard Paris Tel: +33 (1) 44 13 01 11 Matthieu Bucaille Bertrand Moulet Brunswick Group (Media adviser to UCB) Laurent Perpere Tel: +33 (6) 21 06 40 33 Aurelia de Lapeyrouse Tel: +33 (6) 87 80 18 13 Jon Coles Tel: +44 (0)20 7404 5959 Celltech Tel: +44 (0)1753 534 655 Goeran Ando Peter Allen Richard Bungay Morgan Stanley (Joint financial adviser to Celltech) Tel: +44 (0)20 7425 5000 Simon Robey Mark Warham JPMorgan (Joint financial adviser to Celltech) Tel: +44 (0)20 7742 4000 Bernard Taylor Julian Oakley Brunswick Group (Media adviser to Celltech) Tel: +44 (0)20 7404 5959 Jon Coles Wendel Carson

Lazard is acting for UCB and no one else in connection with the Offer and will not be responsible to anyone other than UCB for providing the protections afforded to clients of Lazard or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

Morgan Stanley is acting for Celltech and no one else in connection with the Offer and will not be responsible to anyone other than Celltech for providing the protections afforded to clients of Morgan Stanley or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

JPMorgan is acting for Celltech and no one else in connection with the Offer and will not be responsible to anyone other than Celltech for providing the protections afforded to clients of JPMorgan or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

This press announcement does not constitute an offer or invitation to purchase any securities or a solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by means of an Offer Document and the Acceptance Forms accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. In the United States, UCB will file a Tender Offer Statement containing the Offer Document and other related documentation with the US Securities and Exchange Commission (the "SEC") on Schedule TO and Celltech will file a Solicitation/Recommendation Statement with the SEC on Schedule 14D-9 on the date the Offer Document is mailed to Celltech Shareholders. Free copies of the Schedule TO, the Schedule 14D-9 and the other related documents to be filed by Celltech or UCB in connection with this Offer will be available from the date the Offer Document is mailed to Celltech Shareholders on the SEC's website at http://www.sec.gov/. The Offer Document and Acceptance Forms accompanying the Offer Document will be made available to all Celltech Shareholders at no charge to them. Celltech Shareholders are advised to read the Offer Document and the accompanying Acceptance Forms when they are sent to them because they will contain important information. Celltech Shareholders in the United States are also advised to read the Tender Offer Statement and the Solicitation/Recommendation Statement because they will contain important information.

It should be noted that by virtue of the conflicting provisions of the City Code and the Exchange Act, the Panel has agreed that the Acceptance Condition can be structured so that the Offer cannot become or be declared unconditional as to acceptances until such time as all other conditions of the Offer have been satisfied, fulfilled or, to the extent permitted, waived. The Acceptance Condition in paragraph (a) of Appendix I has been amended accordingly.

Unless otherwise determined by UCB and permitted by applicable law and regulation, the Offer (including the Loan Note Alternative) will not be made, directly or indirectly, in or into, or by use of the mails of, or by any other means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or of any facility of a national securities exchange of Canada, nor will it be made in or into Belgium, Australia or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within Belgium, Australia, Canada or Japan. Accordingly, unless otherwise determined by UCB and permitted by applicable law and regulation, neither copies of this announcement nor any other documents relating to the Offer are being, or may be, mailed or otherwise forwarded, distributed or sent in or into Belgium, Australia, Canada or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions.

The Loan Notes to be issued pursuant to the Loan Note Alternative have not been, and will not be, listed on any stock exchange and have not been and will not be registered under the Securities Act or under any relevant securities laws of any state or other jurisdiction of the United States, or under the relevant securities laws of Belgium, Australia, Canada or Japan or any other jurisdiction. Accordingly, unless an exemption under such relevant laws is available, Loan Notes may not be offered, sold, re-sold or delivered, directly or indirectly, in, into or from the United States, Belgium, Australia, Canada or Japan or any other jurisdiction in which an offer of Loan Notes would constitute a violation of relevant laws or require registration of the Loan Notes, or to or for the account or benefit of any US person or resident of Belgium, Australia, Canada or Japan or any other such jurisdiction.

The Panel wishes to draw the attention of member firms of the New York Stock Exchange to certain UK dealing disclosure requirements during the offer period. The offer period (in accordance with the City Code, which is published and administered by the Panel) commences at the time when an announcement is made of a proposed or possible offer, with or without terms. Celltech has equity securities traded on the London Stock Exchange and the New York Stock Exchange.

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 offeree company. Relevant securities include Celltech Shares, Celltech ADSs, instruments convertible into Celltech Shares or Celltech ADSs and options in respect of any of the foregoing and derivatives referenced to any of the foregoing. This requirement will apply until the first closing date or, if this is later, the date when the Offer becomes or is declared unconditional or lapses.

Disclosure should be made on an appropriate form by no later than 12:00 noon (London time), 7:00 a.m. (New York City time), on the business day following the date of the dealing transaction. These disclosures should be sent a Regulatory Information Service and a copy faxed to the Panel (+44 (0) 20 7638 1554).

The Panel requests that member firms advise those of their clients who wish to deal in the relevant securities of Celltech, whether in the United States or in the United Kingdom, 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 (0) 20 7382 9026, fax number: +44 (0) 20 7638 1554).

This press announcement includes "forward-looking statements" relating to the Offer, UCB and Celltech that are subject to known and unknown risks and uncertainties, many of which are outside of UCB's and Celltech's control and are difficult to predict, that may cause actual results to differ materially from any future results expressed or implied from such forward-looking statements. Important factors that could cause actual results to differ materially from such expectations include, without limitation: the inability to obtain necessary regulatory approvals in the context of the Offer or to obtain them on acceptable terms; the inability to integrate successfully Celltech within UCB or to realise synergies from such integration following the acquisition; costs related to the acquisition of Celltech; the economic environment of the industries in which UCB and Celltech operate; costs associated with research and development; changes in the prospects for products in the research and development pipeline of UCB or Celltech; dependence on the existing management of UCB and Celltech; changes or uncertainties in UK or US federal or state tax laws or the administration of such laws; changes or uncertainties in the laws or regulations applicable to the markets in which UCB and Celltech operate, including those of the Federal Drug Administration in the United States; and other factors detailed in Celltech's filings with the SEC.

PART TWO OF TWO RECOMMENDED CASH OFFER FOR CELLTECH GROUP PLC BY UCB S.A. 1. Introduction The boards of UCB and Celltech announce that they have agreed the terms of a recommended cash offer, to be made by UCB, and outside the United States, by Lazard on its behalf, for the entire issued and to be issued share capital of Celltech either in the form of Celltech Shares or Celltech ADSs. The Offer for each Celltech Share will be 550 pence in cash. This represents 1,100 pence for each Celltech ADS (each Celltech ADS representing two Celltech Shares). The Offer will value the existing issued share capital of Celltech at approximately 1,530 million pounds. The Celltech Board, which has been so advised by Morgan Stanley and JPMorgan, considers the terms of the Offer to be fair and reasonable. In providing advice to the Celltech Board, Morgan Stanley and JPMorgan have taken into account the commercial assessments of the Celltech Board. Accordingly, the Celltech Board unanimously intends to recommend that Celltech Shareholders accept the Offer. Directors of Celltech and certain members of their immediate families have irrevocably undertaken to accept the Offer in respect of the Celltech Shares that they beneficially own and control, amounting in aggregate to 493,029 Celltech Shares, representing approximately 0.18 per cent. of the existing issued share capital of Celltech. Lazard is acting as exclusive financial adviser to UCB in relation to the Offer. Morgan Stanley and JPMorgan are acting as financial advisers to Celltech in relation to the Offer. 2. The Offer UCB and (outside of the United States) Lazard, on behalf of UCB, will offer to acquire, on the terms and subject to the conditions set out below and in Appendix I of this announcement, and to be set out in the Offer Document and the Acceptance Forms, all of the Celltech Shares and Celltech ADSs. The Offer will be made on the following basis: for each Celltech Share 550 pence in cash for each Celltech ADS 1,100 pence (equivalent to $19.44) in cash The Offer will value the existing issued share capital of Celltech at approximately 1,530 million pounds. The Offer will represent a premium of approximately: -- 27.8 per cent. to the middle-market closing price of 430.5 pence per Celltech Share on 17 May 2004, the last business day prior to the date of this announcement; -- 26.3 per cent. to the average middle-market closing price of 435.6 pence per Celltech Share during the three months prior to 17 May 2004; and -- 44.7 per cent. to the average middle-market closing price of 380.1 pence per Celltech Share during the twelve months prior to 17 May 2004. The Celltech Shares (including those represented by Celltech ADSs) will be acquired pursuant to the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement. The Offer Document will be sent to Celltech Shareholders shortly. The Offer will be on the terms and will be subject to the conditions which are set out in Appendix I and to those terms which will be set out in the Offer Document and in the accompanying Acceptance Forms, and such further terms as may be required to comply with the rules and regulations of the Financial Services Authority, the United Kingdom Listing Authority, The London Stock Exchange and with the City Code and US federal securities laws (except to the extent of any exemptive relief granted by the SEC). 3. Loan Note Alternative Celltech Shareholders (other than certain Overseas Celltech Shareholders, including Celltech Shareholders in the United States) who validly accept the Offer will be entitled to elect to receive Loan Notes to be issued by UCB instead of some or all of the cash consideration to which they would otherwise be entitled pursuant to the Offer. The Loan Note Alternative will be made available on the following basis: for every whole 1 pound 1 pound nominal value of Loan Notes in cash consideration The Loan Notes, which will be governed by English law, will be unsecured and will be issued credited as fully paid in amounts and integral multiples of 1 pound nominal value. All fractional entitlements to the Loan Notes will be disregarded. No application will be made for the Loan Notes to be listed or dealt in on any stock exchange. The Loan Notes will bear interest at 0.75 per cent. below six-month sterling LIBOR. Interest will be payable by six-monthly instalments in arrears (less any tax required to be withheld) on 31 March and 30 September in each year. The first payment of interest will be made on 31 March 2005 (the "First Payment Date"). On the First Payment Date, interest will be paid in respect of the period from (and including) the first date of issue of the Loan Notes to (but excluding) the First Payment Date. The Loan Notes will be redeemable in whole or in part for cash at the option of noteholders on 31 March 2005 and on subsequent interest payment dates. In certain circumstances, UCB will have the right to redeem all of the Loan Notes. If not previously redeemed, all outstanding Loan Notes will be redeemed on 30 September 2010. No Loan Notes will be issued unless, on or before the date on which the Offer becomes or is declared unconditional in all respects, valid elections have been received in respect of at least 5 million pounds in nominal value of Loan Notes. If insufficient elections are received, Celltech Shareholders electing for the Loan Note Alternative will instead receive cash in accordance with the terms of the Offer. Subject as aforesaid, the Loan Note Alternative will remain open for acceptance for so long as the Offer remains open for acceptance. The Loan Note Alternative will be conditional upon the Offer becoming or being declared unconditional in all respects. Celltech Shareholders and holders of Celltech ADSs who are not resident in the United Kingdom should refer to paragraph 14 below. Further details of the Loan Notes will be contained in the Offer Document. 4. Irrevocable Undertakings to accept the Offer UCB has received irrevocable undertakings to accept the Offer from Directors of Celltech and certain members of their immediate families in respect of, in aggregate, 493,029 Celltech Shares, representing all of the Celltech Shares beneficially owned and controlled by the Directors and such family members. This represents approximately 0.18 per cent. of the existing issued share capital of Celltech. Such undertakings cease to be binding only if the Offer lapses or is withdrawn. 5. Background to and reasons for the Offer The combination of UCB and Celltech will create a European based company which will be one of the largest biopharmaceutical companies in the world. In a number of important areas the combined group will benefit from a high degree of complementarity: -- Complementary product offerings: the combined group will have strong positions in specialty therapeutic areas such as Central Nervous System (Epilepsy, Multiple Sclerosis, Parkinson's Disease, etc.), Inflammation (Respiratory, Rheumatology, Gastro-Enterology) and Oncology; -- Strengthened research and development: the combined group will benefit from Celltech's innovative expertise in biotechnological R&D, especially monoclonal antibodies, and UCB's expertise in pharmaceutical chemistry. This will result in a significantly strengthened combination of small and large molecule discovery and development expertise allowing the combined group to increase the flow of drug development candidates; -- Stronger and broader commercial operations (US, Europe and Asia): the combined group will be better positioned, through its enhanced global presence, to commercialise and launch new products, particularly in the specialist areas in which the combination will focus and where UCB has already demonstrated its ability to launch and propel products successfully to market leadership (e.g., Keppra); and -- The blending of skills and culture, through the successful combination of competencies at all levels of the combined entity, will accelerate innovation and profitable growth. The combined R&D operations of the Group will have their headquarters in Slough, UK. Dr. Goeran Ando will be deputy CEO of the combined group and Peter Allen will be in charge of integration. As separately announced today, UCB and Celltech have entered into a co-exclusive worldwide collaboration agreement for the research, development and commercialisation of CDP870, Celltech's anti-TNF-alpha PEGylated antibody fragment, for all indications outside of Crohn's disease in North America and major European markets. 6. Financial Effects of the Transaction UCB will finance the acquisition through bank loans. It is expected that the transaction will be earnings accretive, post synergies and before goodwill and other intangibles amortisation, after the second full year. 7. Information on Celltech Celltech is one of the largest European-based biopharmaceutical companies, possessing significant discovery and development capabilities, a broad product pipeline, and an international pharmaceutical business, with operations in the United States and Europe. It derives revenues from the licensing of its technologies and products and the sale of pharmaceutical products through its pharmaceutical business. The discovery and development activities are focused on treatments for auto-immune and inflammatory disorders and oncology. Its pipeline includes candidates comprising new chemical entities and antibody-based therapeutics, in pre-clinical or clinical development and marketing licence registration. Its technology base includes a leading position in antibody engineering and extensive medicinal chemistry capabilities. Celltech has a range of discovery, development and commercialization collaborations with leading pharmaceutical and biotechnology companies including: Abgenix, Amgen, AstraZeneca, Biogen Idec, Johnson & Johnson, Merck, NeoGenesis, Seattle Genetics and Wyeth. Celltech Shares are traded on the London Stock Exchange and Celltech ADSs are listed on the New York Stock Exchange. Cazenove & Co. Limited act as broker to Celltech. For the year ended 31 December 2003, in accordance with generally accepted accounting principles in the United Kingdom, Celltech reported turnover of 353.3 million pounds (2002: 329.6 million pounds) with operating profit pre exceptional items and goodwill of 49.5 million pounds (2002: 49.0 million pounds) and net assets of 505.9 million pounds (2002: 564.4 million pounds). 8. Information on UCB UCB is a world-class pharmaceutical and specialty chemical company. UCB is headquartered in Brussels (Belgium) and employs about 11,500 people, of whom more than 6,600 are in the pharmaceutical sector. UCB operates in two industrial sectors: Pharma and Surface Specialties. It currently comprises the parent company, UCB S.A., together with about 120 subsidiaries and associated companies in Europe, the Americas and Asia. UCB also operates on a worldwide basis through its agents, distributors and licensees. The Pharma Sector researches, produces and markets prescription medical products, particularly in the fields of allergy / asthma and neurology. Over three quarters of the UCB Group's expenditure on research and development is in the Pharma Sector, where it accounts for about 15 per cent. of turnover. UCB is also present in biotechnology, through UCB-Bioproducts, making available peptides by extraction or synthesis to the scientific community. Surface Specialties is focused on the manufacture of technically innovative products and solutions for surface applications. There are two business units: Coating Resins & Additives and Films & Adhesives. UCB's shares are traded on Euronext. Based on the closing middle- market price of euro 35.10 per UCB Share on 17 May 2004 (the last business day prior to the date of this announcement), UCB has a market capitalisation of approximately euro 5.1 billion. For the year ended 31 December 2003, in accordance with generally accepted accounting principles in Belgium, UCB reported group turnover of euro 2,966 million (2002: euro 2,514 million) with group profit before interest, tax and exceptional items of euro 487 million (2002: euro 503 million) and net assets of euro 1,784 million (2002: euro 1,565 million). 9. Management and Employees The board of UCB confirms that, following the Offer becoming or being declared unconditional in all respects, the existing employment rights, including pension rights, of all employees of the Celltech Group will be fully safeguarded. 10. Celltech Share Plans The Offer will (subject to compliance with any applicable local law) extend to any Celltech Shares issued fully paid (or credited as fully paid) or unconditionally allotted or issued prior to the date when the Offer closes (or such earlier date as UCB may, subject to the provisions of the City Code or with the consent of the Panel, decide) as a result of the exercise of options granted under the Celltech Share Plans. As soon as practicable after the Offer becomes or is declared unconditional in all respects, UCB will make appropriate proposals (taking into account any local laws) to holders of options granted under the Celltech Share Plans. 11. Inducement Fee Celltech has agreed to pay a sum to UCB of 15.25 million pounds (being approximately one per cent. of the value of the Offer) in the event that (a) the Directors withdraw their unanimous recommendation of the Offer or recommend an alternative transaction, resulting in any person other than UCB (or any person acting in concert with UCB as defined in the City Code) acquiring control of Celltech (as defined in the City Code) or a substantial part of the business of Celltech; or (b) before the Offer lapses or is withdrawn without becoming or being declared wholly unconditional, any person (other than UCB or a person acting in concert (as defined in the City Code) with UCB) announces an intention to make a competing offer however effected, to acquire the entire issued share capital of Celltech (other than Celltech Shares owned by such third party or persons acting in concert with it) and, at any time, the competing offer becomes or is declared wholly unconditional. 12. Compulsory acquisition, delisting and de-registration If UCB receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Celltech Shares to which the Offer relates and the Offer becomes or is declared unconditional in all respects, UCB intends to exercise its rights pursuant to the provisions of sections 428 to 430F (inclusive) of the Act to acquire compulsorily the remaining Celltech Shares to which the Offer relates. After the Offer becomes or is declared unconditional in all respects, UCB intends to procure the making of an application by Celltech to the UK Listing Authority for the cancellation of the listing of Celltech's Shares on the Official List and to the London Stock Exchange for the cancellation of the admission to trading of Celltech's Shares on its market for listed securities. It is anticipated that cancellation of listing and trading will take effect no earlier than 20 business days after the Offer becomes or is declared unconditional in all respects. UCB also intends to procure that Celltech applies for delisting of the Celltech ADSs from the New York Stock Exchange. Such delistings would significantly reduce the liquidity and marketability of any Celltech Shares or Celltech ADSs not tendered into the Offer. UCB may also request that Celltech terminate the existing deposit agreement through which the ADS programme is operated. It is also proposed that, following the Offer becoming or being declared unconditional in all respects and after the Celltech Shares are delisted, Celltech will be re-registered as a private company under the relevant provisions of the Act. 13. Disclosure of Interests in Celltech Save for the 493,029 Celltech Shares in respect of which UCB has received irrevocable undertakings to accept the Offer, neither UCB nor any of the directors of UCB nor any other UCB subsidiary, nor, so far as UCB is aware, any person acting in concert with UCB for the purposes of the Offer, owns, controls or holds any Celltech Shares or any securities convertible or exchangeable into, or rights to subscribe for, purchase or holds any options to purchase any Celltech Shares or has entered into any derivative referenced to Celltech Shares which remains outstanding. 14. Overseas Celltech Shareholders The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements. Under the terms of the Offer, holders of Celltech Shares and holders of Celltech ADSs who are located in Belgium, Canada, Australia, Japan or the United States or who are US persons will not be eligible to receive Loan Notes. Notwithstanding the foregoing, UCB retains the right to permit the Offer to be accepted and any sale of securities pursuant to the Offer to be completed if, in its sole discretion, it is satisfied that the transaction in question can be undertaken in compliance with applicable law and regulation. Lazard Freres & Co. LLC is acting as the dealer manager for the Offer in the United States. 15. Collaboration Agreement Celltech has announced today that it has entered into an agreement with UCB for the worldwide development and marketing of CDP870, Celltech's anti-TNF-alpha PEGylated antibody fragment. Under the terms of the agreement, Celltech grants UCB co-exclusive worldwide rights to develop and commercialise CDP870. The license is exclusive for rheumatoid arthritis and other indications, excluding Crohn's disease. UCB will be responsible for the conduct of future clinical studies and all commercialisation activities with CDP870 other than in Crohn's disease, and will pay Celltech a significant royalty on sales in these indications. UCB will also make progress- related payments to Celltech dependent upon attaining certain project related milestones. Celltech retains manufacturing rights and will supply all CDP870 material for commercialisation, and will discharge all royalties due to third parties. Celltech retains exclusive rights for the development and commercialisation of CDP870 in Crohn's disease in North America, major European markets, Australia and New Zealand with UCB having development and commercialisation rights in other territories. The CDP870 license agreement is not conditional upon the success of the proposed Offer for Celltech by UCB. General

The Offer will be made on the terms and subject to the conditions set out herein and in Appendix I, and to be set out in the Offer Document and the accompanying Acceptance Forms. These will be despatched to Celltech Shareholders and holders of Celltech ADSs and for information only, to participants in the Celltech Share Schemes, in due course. The Offer and acceptances thereof will be governed by English law. The Offer will be subject to the applicable requirements of the City Code, the Panel, the London Stock Exchange, the UK Listing Authority and the Exchange Act.

The availability of the Offer to persons not resident in the United Kingdom or the United States may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves of, and observe, any applicable requirements.

Details of the sources and bases of certain information set out in this announcement are included in Appendix II. Certain terms used in this announcement are defined in Appendix III.

The Offer will be made by UCB and (outside the United States) by Lazard on its behalf.

In connection with the Offer, Panmure Gordon, a division of Lazard is acting as broker to UCB.

Celltech confirms that its current issued share capital (including those represented by Celltech ADSs) comprises 278,128,673 ordinary shares of 50 pence each. The International Securities Identification Number for Celltech Shares is GB0001822765. There are 2,919,709 Celltech ADSs in issue, each Celltech ADS representing two Celltech Shares. The International Securities Identification Number for Celltech ADSs is US1511581027.

PRESS ENQUIRIES: UCB Tel: +32 (2) 559 92 99 Roch Doliveux Laurence Battaille Lazard (Financial adviser to UCB) London Tel: +44 (0)20 7187 2000 William Rucker David Gluckman Will Thompson New York Tel: +1 (212) 632 6000 Stephen Sands Jason Bernhard Paris Tel: +33 (1) 44 13 01 11 Matthieu Bucaille Bertrand Moulet Brunswick Group (Media adviser to UCB) Laurent Perpere Tel: +33 (6) 21 06 40 33 Aurelia de Lapeyrouse Tel: +33 (6) 87 80 18 13 Jon Coles Tel: +44 (0)20 7404 5959 Celltech Tel: +44 (0)1753 534 655 Goeran Ando Peter Allen Richard Bungay Morgan Stanley (Joint financial adviser to Celltech) Tel: +44 (0)20 7425 5000 Simon Robey Mark Warham JPMorgan (Joint financial adviser to Celltech) Tel: +44 (0)20 7742 4000 Bernard Taylor Julian Oakley Brunswick Group (Media adviser to Celltech) Tel: +44 (0)20 7404 5959 Jon Coles Wendel Carson

Lazard is acting for UCB and no one else in connection with the Offer and will not be responsible to anyone other than UCB for providing the protections afforded to clients of Lazard or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

Morgan Stanley is acting for Celltech and no one else in connection with the Offer and will not be responsible to anyone other than Celltech for providing the protections afforded to clients of Morgan Stanley or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

JPMorgan is acting for Celltech and no one else in connection with the Offer and will not be responsible to anyone other than Celltech for providing the protections afforded to clients of JPMorgan or for providing advice in connection with the Offer, the contents of this announcement or any transaction or arrangement referred to herein.

This press announcement does not constitute an offer or invitation to purchase any securities or a solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by means of an Offer Document and the Acceptance Forms accompanying the Offer Document, which will contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. In the United States, UCB will file a Tender Offer Statement containing the Offer Document and other related documentation with the SEC on Schedule TO and Celltech will file a Solicitation/Recommendation Statement with the SEC on Schedule 14D-9 on the date the Offer Document is mailed to Celltech Shareholders. Free copies of the Schedule TO, the Schedule 14D-9 and the other related documents to be filed by Celltech or UCB in connection with this Offer will be available from the date the Offer Document is mailed to Celltech Shareholders on the SEC's website at http://www.sec.gov/. The Offer Document and Acceptance Forms accompanying the Offer Document will be made available to all Celltech Shareholders at no charge to them. Celltech Shareholders are advised to read the Offer Document and the accompanying Acceptance Forms when they are sent to them because they will contain important information. Celltech Shareholders in the United States are also advised to read the Tender Offer Statement and the Solicitation/Recommendation Statement because they will contain important information.

It should be noted that by virtue of the conflicting provisions of the City Code and the Exchange Act, the Panel has agreed that the Acceptance Condition can be structured so that the Offer cannot become or be declared unconditional as to acceptances until such time as all other conditions of the Offer have been satisfied, fulfilled or, to the extent permitted, waived. The Acceptance Condition in paragraph (a) of Appendix I has been amended accordingly.

Unless otherwise determined by UCB and permitted by applicable law and regulation, the Offer (including the Loan Note Alternative) will not be made, directly or indirectly, in or into, or by use of the mails of, or by any other means or instrumentality (including, without limitation, telephonically or electronically) of interstate or foreign commerce of, or of any facility of a national securities exchange of Canada, nor will it be made in or into Belgium, Australia or Japan and the Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within Belgium, Australia, Canada or Japan. Accordingly, unless otherwise determined by UCB and permitted by applicable law and regulation, neither copies of this announcement nor any other documents relating to the Offer are being, or may be, mailed or otherwise forwarded, distributed or sent in or into Belgium, Australia, Canada or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from such jurisdictions.

The Loan Notes to be issued pursuant to the Loan Note Alternative have not been, and will not be, listed on any stock exchange and have not been and will not be registered under the Securities Act or under any relevant securities laws of any state or other jurisdiction of the United States, or under the relevant securities laws of Belgium, Australia, Canada or Japan or any other jurisdiction. Accordingly, unless an exemption under such relevant laws is available, Loan Notes may not be offered, sold, re-sold or delivered, directly or indirectly, in, into or from the United States, Belgium, Australia, Canada or Japan or any other jurisdiction in which an offer of Loan Notes would constitute a violation of relevant laws or require registration of the Loan Notes, or to or for the account or benefit of any US person or resident of Belgium, Australia, Canada or Japan or any other such jurisdiction.

The Panel wishes to draw the attention of member firms of the New York Stock Exchange to certain UK dealing disclosure requirements during the offer period. The offer period (in accordance with the City Code, which is published and administered by the Panel) commences at the time when an announcement is made of a proposed or possible offer, with or without terms. Celltech has equity securities traded on the London Stock Exchange and the New York Stock Exchange.

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 offeree company. Relevant securities include Celltech Shares, Celltech ADSs, instruments convertible into Celltech Shares or Celltech ADSs and options in respect of any of the foregoing and derivatives referenced to any of the foregoing. This requirement will apply until the first closing date or, if this is later, the date when the Offer becomes or is declared unconditional or lapses.

Disclosure should be made on an appropriate form by no later than 12:00 noon (London time), 7:00 a.m. (New York City time), on the business day following the date of the dealing transaction. These disclosures should be sent to a Regulatory Information Service and a copy faxed to the Panel (+44 (0) 20 7638 1554).

The Panel requests that member firms advise those of their clients who wish to deal in the relevant securities of Celltech, whether in the United States or in the United Kingdom, 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 (0) 20 7382 9026, fax number: +44 (0) 20 7638 1554).

The directors of UCB accept responsibility for the information contained in this announcement, other than that relating to the Celltech Group, the directors of Celltech and their immediate families, related trusts and persons connected with them, for which the directors of Celltech accept responsibility as set out below. To the best of the knowledge and belief of the directors of UCB (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything to affect the import of such information.

The directors of Celltech accept responsibility for the information contained in this announcement relating to the Celltech Group, themselves and their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the directors of Celltech (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they are responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.

This press announcement includes "forward-looking statements" relating to the Offer, UCB and Celltech that are subject to known and unknown risks and uncertainties many of which are outside of UCB's and Celltech's control and are difficult to predict, that may cause actual results to differ materially from any future results expressed or implied from such forward-looking statements. Important factors that could cause actual results to differ materially from such expectations include, without limitation: the inability to obtain necessary regulatory approvals in the context of the Offer or to obtain them on acceptable terms; the inability to integrate successfully Celltech within UCB or to realise synergies from such integration following the acquisition; costs related to the acquisition of Celltech; the economic environment of the industries in which UCB and Celltech operate; costs associated with research and development; changes in the prospects for products in the research and development pipeline of UCB or Celltech; dependence on the existing management of UCB and Celltech; changes or uncertainties in UK or US federal or state tax laws or the administration of such laws; changes or uncertainties in the laws or regulations applicable to the markets in which UCB and Celltech operate, including those of the Federal Drug Administration in the United States; and other factors detailed in Celltech's filings with the SEC.

FIRST AND FINAL ADD -- APPENDIX I -- TO FOLLOW

Celltech Group plc

CONTACT: Roch Doliveux or Laurence Battaille of UCB, +32-2-559-92-99; orLondon, William Rucker, David Gluckman, or Will Thompson, +44-20-7187-2000,New York, Stephen Sands or Jason Bernhard, +1-212-632-6000, or Paris, MatthieuBucaille or Bertrand Moulet, +33-1-44-13-01-11, all of Lazard (Financialadviser to UCB); or Laurent Perpere, +33-6-21-06-40-33, Aurelia de Lapeyrouse,+33-6-87-80-18-13, or Jon Coles, +44-20-7404-5959, all of Brunswick Group(Media adviser to UCB); or Goeran Ando, Peter Allen, or Richard Bungay, all ofCelltech, +44-1753-534-655; or Simon Robey or Mark Warham, both of MorganStanley (Joint financial adviser to Celltech), +44-20-7425-5000; or BernardTaylor or Julian Oakley, both of JPMorgan (Joint financial adviser toCelltech), +44-20-7742-4000; or Jon Coles or Wendel Carson, both of BrunswickGroup (Media adviser to Celltech), +44-20-7404-5959




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