The board of Aberdeen oil and gas operator Venture Production conceded defeat yesterday in its defence against the £1.3billion hostile takeover by Centrica.
The Scottish and British Gas owner revealed on Monday night it had built a near-60% controlling stake in the business.
The board of Venture said yesterday that it continued to believe that Centrica’s final offer of 845p a share substantially undervalued the Granite City business, but added: “Should Centrica receive acceptances which result in Centrica holding 75% or more of Venture’s shares, Centrica’s stated intention is to procure that Venture applies to the UK Listing Authority for the cancellation of its listing on the official list and to the London Stock Exchange for the cancellation of its admission to trading.
“Consequently, there is a risk that Venture shareholders who do not accept the offer could, as a result, own a minority interest in an unlisted company. This would significantly reduce the liquidity and marketability of Venture shares.
“Therefore, the board . . . recommends that, in the event that the offer is declared wholly unconditional by Centrica, shareholders accept the offer, as the directors have decided they will do in respect of their own beneficial holdings.”
Centrica said yesterday it expected that settlement of the acquisition of shares announced on August 21 and 24 would happen tomorrow, allowing Centrica to declare the offer wholly unconditional.
Centrica chief executive Sam Laidlaw said: “I know that the acquisition process will have created uncertainty for Venture staff, but I can reassure them that we intend to develop and grow the business and their skills and experience will be vital to a successful future.
“The deal sees us continuing our investment in the North Sea, which is good news for our customers and shareholders. It further reduces our overall exposure to volatile movements in wholesale gas prices and helps secure UK energy supplies.”
More than 300 people work for Venture in Scotland and the Netherlands.
All four executive directors of Venture have shareholdings in the company, with chief executive Mike Wagstaff thought to be in line to collect nearly £29million following the sale.
A spokeswoman for Venture said it was too early to comment on whether Mr Wagstaff, Rod Begbie, Jonathan Roger and Peter Turner planned to stay on after the deal goes through.
Larry Kinch, one of Venture’s co-founders in 1997 and a non-executive director with about 7.4% of the shares, previously urged other shareholders to hold out for at least £10 a share. His stake in the company is worth more than £93million.
Mr Kinch and ArcLight Capital Partners, an American energy investment firm which controls 5.4% of Venture shares, are now accepting the Centrica offer.
Centrica made a move for the Aberdeen company to boost its gas production and reduce dependence on volatile wholesale markets.
It produces about 35% of its energy needs out of its own resources, although this should increase to 45% with its acquisition of a 20% stake in nuclear-power firm British Energy from French energy giant EDF. Buying Venture means Centrica can supply 60% of its energy from its own assets and resources.
Venture had production for the first half of this year of 52,988 barrels of oil equivalent per day, up 16% year- on-year. Revenue rose 14% to £274.7million, although lower oil and gas prices cut pre-tax profits by 7% to £105.2million.