View from City Road: Enterprise wrong-footed by the Takeover Panel

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The Independent Online
Enterprise Oil's pounds 1.45bn bid for Lasmo was badly wrong-footed as a result of the Takeover Panel's curiously judged decision to force the company to declare its interest before it was ready to make its offer. All surprise - half the battle in takeover scraps - was lost. Enterprise lost the initiative, giving Lasmo the chance to marshal its defences; a highly effective job it has done of it, too.

Lasmo, of course, has little case for independence after the disasters of recent years. It has been a walking accident, gobbling up shareholders' money with an appetite worthy of an intergalactic black hole.

Nevertheless, it has managed to be highly effective in rubbishing Enterprise's bid. 'We may be a dreadful company - though things are on the change - but this bid is equally dreadful and incomprehensible,' seems to be the general line.

The bid highlights Enterprise's weaknesses as much as Lasmo's, advisers insist. Big is not necessarily beautiful in the oil industry, and anyway this is a curiously timed bid, coming after Lasmo has successfully managed to shore up its finances with an underwritten pounds 219m rights issue. Surely the time to have made a bid was six months ago when the shares and Lasmo were still flat on their back. Does this not show a lack of judgement by Graham Hearne, Enterprise's chief executive?

The structure of the offer, too, with its new low-yielding shares, would seem to show a certain lack of self-confidence, Lasmo claims.

It has got a point. Mr Hearne was no doubt right to delay bidding until he was certain what he was bidding for, but he will have to move rapidly to regain the initiative. His case, in truth, is a compelling and highly persuasive one; right now, however, he is in danger of losing the public relations battle.