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Centrica has won the battle to gain control of the North Sea gas producer Venture Production.
The victory came as more than 50% of Venture's shareholders were persuaded that Centrica's 845p a share offer valuing Venture at £1.3 billion was good enough value.
The capture of Venture is a strategic coup for Centrica which desperately needs Venture's output to supply the 10 million customers in its British Gas subsidiary.
But industry experts warned that Centrica may yet have a battle on its hands to keep hold of key Venture operating staff, most of whom have significant holdings in Venture's shares and who are upset at what they see as Centrica's acquisition of their company on the cheap.
Centrica said today it has acquired enough shares and enough other commitments to take its holding in Venture above the 50% it needed for the its takeover offer to go unconditional.
The group first parked its tanks on Venture's platforms in March when it snapped up over a fifth of the company's shares in a £240 million raid at 725p. It came back again last month lifting its stake to 29% and making a hostile offer for the rest of the shares at 845p.
That sparked a row amongst shareholders. While cash-strapped private equity house 3i sold up, a couple of other significant minority investors made it clear they believed Centrica's price was a steal and that at least £10 a share was a fairer offer.
Ahead of formal announcements this week, Centrica pointed to its stated reasons for a deal, that “the acquisition of Venture is consistent with Centrica's announced strategy of reducing the group's overall exposure to movements in the wholesale gas price through increased vertical integration”.
This means that with its own output in Morecambe Bay and the North Sea in steep decline, it needs the assets of new producers like Venture.
A pure-play North Sea operator which has picked up fields ditched by other larger producers, Venture last year made £230 million of profits on revenues approaching half a billion pounds.
More important than the amount of gas it is currently extracting — the equivalent of 52,000 barrels of oil a day — Venture has the equivalent of 240 million barrels of proven reserves in 48 fields of which 21 are currently in production.
Venture has also chalked up a number of exciting finds in a basin which is generally regarded as being in desperate decline.
The deal is just the latest company-changing move by Centrica chief executive Sam Laidlaw, who recently brokered a 23% stake in UK nuclear generator British Energy after its takeover by EDF of France.
Reader views (1)
The Takeover of Venture Production by Centrica is nothing short of an act of outrageous business piracy.
Venture are a company that have continuously
met it's targets on growth & performance and has a entrepreneural spirit which is second to none in this industy sector and indeed in the UK despite recession.
Venture have been let down badly by the City
Institutions and Hedge Fund Managers who's shallow integrity and lack of understanding of the business and despite promises to hold out for a more favourable price, have sold out to the opportunist predator for a marginal return but yeilding a nice bonus to the seller
Venture will now doubtless disappear into the amorphous mass of Centrica rewarding neither it's shareholders or clients with the benefits that could have been if Venture remained independent. Centrica's hostile bid
was an unsavoury act of aggression which will
be rewarded only if it carries Venture's current team which seems unlikely. Advice
given by the Directors of Venture which was accurate and based on current facits of the business plan to reject the offer were ignored by the main players to the ultimate detriment of the smaller shareholders .
Centrica claim that the ultimate benefit of the takeover is to it's gas users - that will be a first!
- John G Sears, Weybridge Surrey UK
