Eni's GBP2.7 billion Lasmo offer unchallenged by Amerada
Friday, December 22 2000 - 06:00 AM WIB
Dow Jones Newswire Thursday reported that Amerada Hess Corp.(AHC) would not increase its bid for U.K. oil producer Lasmo PLC (LSM),confirmed analysts' assumptions that Italy's Eni Spa (IENI) is strong favorite to win control.
Amerada hadn't been seen likely to top Eni's GBP2.7 billion cash offer, which was some 12% higher than Amerada's offer of six weeks ago. Eni's offer was seen more appealing to U.K. investors because it is a straight cash transaction whereas Amerada's offer included Amerada shares and those can't be traded in the U.K.
"This is a knockout blow (to Amerada's offer)," said Peter Hitchens, analyst at Williams de Broe.
Eni's offer is backed by Lasmo management who recommended shareholder to accept the deal. A source close to the deal told Dow Jones Newswires that Lasmo's two largest shareholders, Schroeder Investment Management Ltd. and Electrafina Holdings BV, with a joint stake of over 20%, had already accepted the offer.
Eni's proposal doesn't come as much of a surprise. The company has long been seen as the main predator in the European market, said Hitchens. The slow pace of its privatization caused it to lag behind other major oil producers in acquisitions and mergers and the firm was seen as losing market share.
One trader said that Eni had offered a fair price for Lasmo and that the deal seemed like a good fit.
An Eni adviser said the firm had been keeping a close eye on Lasmo for some time because of Lasmo's North Sea and Africa assets, both areas where Eni already operates.
"The acquisition of Lasmo also gives Eni a foothold in Venezuela and Indonesia," two fast growing areas for oil production, said the adviser.
Eni shares skidded in Milan on news of its bid for Lasmo, falling by 4.1%, to 6.54 euros, while Lasmo surged in London, rising 23.50 pence, or 13%, to 200.50 pence. (*)