With barely 10 days to go before the bid closes on 1 July, a key group of Lasmo's UK shareholders is preparing to reject the offer. They are likely to be joined by a significant number of US institutions.
However, most UK investors contacted by the Independent on Sunday have yet to make a decision. Lasmo's fate will largely rest with Phillips & Drew Fund Management, the UBS-owned unit that controls over 16 per cent of Lasmo and has been adding to its stake in the past few days.
Both sides in the contest like to think they have PDFM on their side, but the fund manager has given no clear sign of its intention, beyond the purchases. Neutrals argue that probably indicates support for Enterprise.
Some investors fear Enterprise may have offered too much, while others feel that the package of second-class Enterprise paper and warrants is not sufficiently attractive.
One blue-chip UK investor said: 'I suspect the bid is finely balanced. Enterprise has not made a good enough case and we think the bid's benefits relatively marginal. It will also reduce the choice of large companies in the sector.'
Much will depend on how institutional investors respond to final presentations from the two sides this week. Both Lasmo and Enterprise fly to the US on Wednesday to press their cause. One US investor said: 'We are not interested in any offers that don't include cash. We would rather take our chance on Lasmo. Others feel the same way.'
Enterprise shares closed 16.5p higher at 414.5p on Friday, suggesting the offer will fail. Lasmo rose 8p to 149p, on the back of a higher oil price and hopes of a counter-bid.Reuse content