Investors rebuff Venture offer from Centrica

CENTRICA, the owner of British Gas, faced a setback in its battle to take over Venture Production yesterday, when the North Sea gas producer’s two largest investors backed management’s rejection of the $2bn (£1.2bn) bid.

US investment firm ArcLight Capital Partners and one of Venture’s founders, Larry Kinch, which between them control 12.8 per cent of Venture’s shares both agreed that Centrica’s 845p a share offer undervalued Venture.

“I believe that Venture’s shares have a value of at least £10 per share,” said Kinch, who owns about 7.4 percent of the company.

Centrica, which yesterday said it had boosted its stake in Venture to 29.9 per cent, is eager to boost its gas production so that it does not have to buy so much on the wholesale market, where prices are volatile.

Analysts agreed with the investors, saying that in valuing Venture’s reserves at around $10 a barrel, Centrica’s offer was low compared with other North Sea deals done over the past year.

And Evolution Securities analyst Richard Griffith said: “Centrica’s offer of 845p for the remainder of Venture is cheeky in our view.”