Centrica finally wins control of Venture after £1.3bn bid battle
Tuesday 25 August 2009
Centrica gained control of Venture Production yesterday after buying a 16.8 per cent stake in its target on the open market, bringing the long-running takeover battle with the North Sea oil and gas company to a close.
The UK's largest utility, which includes British Gas, has been after Venture for months as part of a strategy to build up its own supplies and insulate the group from increasingly volatile wholesale gas prices.
Venture's management has consistently rejected Centrica's overtures. But trading yesterday saw Centrica raise its existing 31.7 per cent stake in Venture by 16.8 per cent. The larger company already has acceptances of its 845p-per-share hostile offer from owners of another 10.2 per cent of Venture's shares, meaning in effect it has 58.7 per cent of the company. However, Centrica can only officially declare the bid unconditional and won on Thursday once its latest purchases are settled. It will then need to gain support of 75 per cent of shareholders to delist the company.
Centrica got the go-ahead for the deal from the European competition watchdog last Friday and the extended deadline for a decision from investors is the end of this week. Venture Production's board is now expected to recommend the offer.
The tussle between the two companies begin in March, with Centrica's announcement that it had built a 22.3 per cent stake in Venture at 725p per share. Venture branded the move as "opportunistic". By July, Centrica made an offer at 845p per share, valuing the company at £1.3bn. But Mike Wagstaff, the Venture chief executive, said the offer did not fairly reflect the value of the company's resources, and that shareholders should hold out for at least 900p.
Venture's gas assets are the UK's biggest outside those held by major utilities. Gas accounts for around two-thirds of its daily production of 45,000 barrels of oil equivalent (boe).
Centrica's shares closed up 2.6 per cent, or 6p, at 234.8p.
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