Venture hopes for quick announcement by Centrica on bid

Published on Thursday 18 June 2009 22:00

VENTURE Production is hoping Centrica will declare whether it will bid for it within a matter of days, allowing the Aberdeen-based company to avoid being forced to seek shareholder approval for the sale of stakes in several North Sea oil fields, writes Hamish Rutherford.

On Wednesday, the Takeover Panel ordered British Gas owner Centrica, which holds almost 24 per cent of Venture's shares, to make a firm bid for the Scottish oil company – or walk away – by 13 July. The "put up or shut up" order was issued at the request of Venture, which said its ability to do business was being hampered by the uncertainty caused by Centrica, which said in March it might buy the company.

Yesterday, Venture revealed that it had agreed a 96.5 million sales of interests in several southern North Sea fields, to Nuon, a Dutch company which is itself being acquired by Swedish energy company Vattenfall. Venture had flagged the possible sale to the market and yesterday's deal followed an open auction which other investors, including Centrica, would have been aware of.

But because Venture remains in an offer period, the sale requires the approval of its shareholders at an extraordinary meeting, which is likely to be held in early July.

If Centrica walks away from a possible deal before the meeting – which Venture now believes is increasingly likely – the Aberdeen company believes it will not have to hold the vote.

Nathan Piper, an Edinburgh-based analyst at Royal Bank of Canada said Venture's latest deal was sensible, but did not appear to be a defensive manoeuvre. He said: "It's not like they've sold the crown jewels".

But Piper added that clarity from Centrica would allow Venture – which specialises in buying oil discoveries and developing them – to get back to business. "At the start of the year Venture had a wonderful opportunity to buy upsmaller companies and assets . They're probably the best company to do it, but the Centrica deal has probably stopped that, or at least impaired that."

A spokesman for Centrica declined to comment on its intentions on making a bid, or whether it would support the asset sale.