Shares in Enterprise Oil soar as bid rejected


Oil producer Enterprise Oil has rejected a bid approach from the acquisitive Italian energy giant ENI, industry sources said today.

Enterprise shares raced up 21 per cent to close at 605p, valuing the company at £2.92 billion sterling.

ENI is the world's sixth largest energy company and has a joint venture with Enterprise in southern Italy.

It bought Britain's number two oil independent, Lasmo, last year, and has an ambitious growth programme and cash to spend on acquisitions.

Depressed energy sector share prices in recent months have made acquiring oil and gas assets by takeovers cheaper than the cost of having to find and develop new reserves, analysts say.

Bid talk has regularly surfaced around Enterprise since Lasmo and others were snapped up in a series of waves of industry consolidation.

But Tuesday's statement was the first confirmation of an approach since abortive merger discussions between Enterprise and Lasmo in 1999.

One of the main attractions of Enterprise is that its production is almost entirely in developed countries, which have allowed it to avoid some of the political conflicts besetting companies with interests in the Middle East or South America.

The company has proven and probable reserves of 1.41 billion barrels of oil equivalent (boe) and operates fields in Italy, Norway, Denmark, Britain and the Gulf of Mexico.