SHAREHOLDERS in Venture Production, the North Sea oil and gas group under siege from Centrica, will demand at least 900p a share to accept a takeover, according to Venture chief executive Mike Wagstaff.

He said the 845p-a-share offer from the owner of British Gas, which was launched late on Friday and values Venture at £1.3 billion, “substantially undervalues the group and its prospects”.

“We have spoken to our large shareholders and they all want more than 900p, and in some cases they are talking about more than 950p and more than 1,000p,” he said.

Centrica has been stalking Venture for some months as part of its strategic plan to increase its in-house gas reserves.

Venture is the leading independent gas producer in the North Sea where it has a large portfolio of prospective drilling sites. Centrica took a 23.6% stake in March at 725p a share, and on Friday announced a hostile and final offer of 845p.

At the same time, it said it had increased its stake in the company to 29%, having bought out 3i, the private-equity group that was one of Venture’s largest investors.

Sam Laidlaw, Centrica’s chief executive, said the two groups had several large institutional shareholders in common, and that Centrica would initially concentrate on these investors. Advisers to Centrica think that the backing of these groups could be sufficient to carry it past the 50% stake that it needs to be successful.

Laidlaw also questioned Venture’s stated level of reserves, saying a large percentage can only be explored by a bigger group. “This deal is good for both sets of shareholders and it enables gas reserves to be exploited that may not have been because we have a bigger balance sheet,” he explained.

Wagstaff said Venture’s directors were not wedded to remaining independent. “We have never advocated a solely independent strategy. This is simply about price, and the true value of the group.”

He questioned Centrica’s tactics in making a final offer — which means it cannot increase its price in the next year unless a rival bidder emerges. “If they are making this offer without having engaged with us and without having done proper due diligence, that must tell shareholders that they are confident its real value is much greater. What they are really trying to do is scare shareholders into accepting,” he said.

Centrica said its offer price was 45.7% higher than Venture’s share price on March 17, the day before it took its stake and announced it was considering a takeover.

It also said that gas prices had fallen in recent months, making its price even more attractive.

Wagstaff countered that price declines were a red herring. “The gas price normally falls away in summer. And Centrica are in a difficult position publicly on gas prices — they can’t say they are falling and then not lower the prices they charge consumers through British Gas.”

There is a chance the takeover battle could be swayed by drilling under way in the North Sea. Venture is working on two prospects, one in the eastern Irish Sea and the other, a well called Andrea, in the south. Andrea is regarded as the more important prospect, with news from appraisal wells expected shortly.

Centrica’s offer document is expected in the next few weeks. If successful, it would be the second big deal for the company this year.

In May, it paid £2.3 billion for a 20% stake in British Energy, the UK nuclear generator that is now majority owned by France’s EDF.

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