2nd UPDATE: Centrica Passes 50% Mark In Venture Battle

Centrica PLC (CNA.LN) moved closer to taking over U.K. oil and gas producer Venture Production PLC (VPC.LN), saying late Monday that it either owned or had acceptances for 58.7% of Venture's share capital.

Centrica, which received European Commission clearance for the deal Friday, is looking to the Venture acquisition to help shore up its gas supplies and strengthen its position in the U.K. energy market. The move is opposed by Venture's board.

Securing gas and electricity supplies for its 15.5 million-strong customer base has long been an issue for Centrica, which faces dwindling reserves. But with volatile energy markets making energy security a top priority for governments and companies alike, the issue has become even more pressing for Centrica.

At the end of last year, Centrica supplied around a third of its gas requirements from its own gas fields and over half of its electricity sales from its own generation facilities - the rest is purchased in volatile wholesale markets.

In its late statement, it said it had acquired through the day a further 25.2 milllion shares in Venture, representing about 16.8%, at 845 pence a share.

Taking the acceptance level at 1600 GMT on Aug. 21 of 41.9% and Centrica's holding in Venture at the time of its Monday announcement, Centrica either owns, has acquired subject to settlement, or has received valid acceptances of its offer, shares representing around 58.7% of the existing issued share capital of Venture, the company said. In an earlier statement Monday, Centrica had said it either owned or had acceptances for 50.3% of Venture's share capital.

Centrica, which said it expects the settlement of these purchases will take place Aug. 27, will declare the offer wholly unconditional when it officially passes the 50% mark.

A spokesman from Venture declined to comment.

Venture's management has been trying to fend off Centrica's GBP1.3 billion hostile takeover bid, saying the 845-pence-a-share offer substantially undervalues the company and its long-term growth prospects.

Centrica was formed in 1997, when state monopoly British Gas PLC was split into Centrica and what was later to become BG Group PLC. The demerger left Centrica with the gas production business of the now-declining Morecambe gas fields in the East Irish Sea, while BG Group was left with the North Sea gas fields.

For several years, Centrica pursued a strategy of diversification, buying a range of companies away from its core business of supplying gas and electricity.

But since the 2006 appointment of Sam Laidlaw as Chief Executive, Centrica has been buying up exploration acreage in Norway, Nigeria and the Caribbean. Earlier this year, it boosted its electricity resources by buying 20% of the U.K.'s largest nuclear power generator, British Energy, from Electricite de France SA (EDF.FR).

Centrica shares closed up 2.6% at 235 pence. Shares in Venture closed up 0.1% at 844 pence.

Goldman Sachs International (GS), JP Morgan Cazenove and RBS Corporate Finance Ltd and Hoare Govett Ltd. are acting as financial advisers for Centrica on the proposed deal.

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

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

(James Herron contributed to this item.)

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