Author: By Mark Leftly
Centrica made an 845p-a-share offer late on Friday, ahead of a deadline tomorrow that had been ordered by the Takeover Panel. The Venture board, headed by chief executive Mike Wagstaff, has rejected the offer, with insiders saying that the shares are worth at least 950p.
Mr Laidlaw said on Friday night: “This is definitely a final offer, we would only amend it if there was a competitor bid and we think that’s unlikely. What this deal does for us is take out a lot of commodity price risk.” Venture produced 45,000 barrels of oil a day at the end of last year and has 240 million barrels of reserves.
Mr Laidlaw said that this guaranteed supply would provide a “structural hedge”, so that Centrica would have sufficient reserves should there be a surge in demand for energy.
“At the moment we have only 20 per cent of supply for our structural needs, but this will give us more than 60 per cent,” he said. “This is good for customers as [prices] will be less volatile and it gives them security of supply.”
Mr Laidlaw added that, should a deal go through, the company would have a similar level of spare supply as rivals such as Scottish Power and npower.
Mr Wagstaff countered, this weekend: “In no way does this offer recognise the strategic position and high quality of our UK gas reserves and resources for which the markets have clearly and consistently established significantly higher values across a number of recent transactions.”
Centrica went hostile after raising its stake from 23.6 to 29 per cent on Friday. Mr Laidlaw admitted that making a hostile bid “wouldn’t have been our first choice”, adding that he had warned Mr Wagstaff only shortly before the 6.47pm announcement.
Centrica raised £2.2bn for acquisitions through a rights issue last year. Part of this was used to take a 20 per cent stake in nuclear electricity group British Energy.
Centrica argues that the deal is good value for both sets of shareholders, as the offer represents a 45.7 per cent premium to the share price the day before the commencement of the offer period in March.
A hedge-fund manager with a stake of around 1 per cent in Venture said that he would probably accept the offer. He predicted that the final vote would be “a squeaker”, with Centrica just about securing enough shareholder support.
Centrica closed at 218.25p on Friday, Venture at 785p.
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