Venture: Centrica Offer Undervalues Co, Should Be Rejected

U.K. utility Centrica PLC's (CNA.LN) 845-pence-a-share offer for Venture Production PLC (VPC.LN) "substantially undervalues" the company and should be rejected, Venture said Friday.

Centrica's offer values Venture at GBP1.3 billion.

"My message to shareholders remains clear - do not sell your shares on the cheap to Centrica," Venture Chairman John Morgan said in a statement. "Venture is worth substantially more than 845p per share. Shareholders should not sign any document which Centrica or its advisers send to them."

Late Thursday, Centrica said it had received acceptances representing around 10.9% of Venture's current issued share capital, taking its potential stake in the company up to 40.8%.

Centrica also said it was extending the offer period until 1200 GMT on Aug. 28.

Centrica is aiming to get more than 50% of Venture, which would give it control of the U.K. independent oil and gas company.

Centrica's natural gas reserve base is dwindling. The utility wants Venture's gas output to help supply Centrica's 15.5 million gas and electricity customers in the U.K.

At 1302 GMT, Centrica shares were up 0.5% at 221 pence, mostly in line with the broader market. Venture shares were up 0.4% at 841 pence.

Company Web site: http://vpc.co.uk

Company Web site: http://www.centrica.co.uk

-By Selina Williams, Dow Jones Newswires +44 207 842 9262; selina.williams@dowjones.com

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