Enterprise Oil plc, London, has started a bid to acquire Lasmo plc, also of London, which could create an upstream company valued at more than 3.5 billion ($5.25 billion).

Enterprise said the two companies combined would have reserves of more than 1.6 billion bbl of oil equivalent with interests in 26 countries. Operations of the two companies have little overlap.

Enterprise's offer of a stock exchange values Lasmo at 1.448 billion ($2.172 billion) and was officially offered to Lasmo shareholders May 2. Under London Stock Exchange rules, Enterprise has 60 days from that date to gain a majority stare of Lasmo.

Enterprise said the bid valued Lasmo common shares at 1.50 ($2.25) each, a 10% premium on the share price prior to speculation before the bid was made public.

Lasmo's board advised shareholders to reject the offer because it fails to recognize the value of Lasmo and is at a discount to the market price.

Following Enterprise's postal presentation of the offer to Lasmo shareholders, Lasmo said the bid ignored a 7% fall in the Enterprise share price since the offer was announced.

To help ward off the bid, Lasmo brought forward appointment of a new chairman, Rudolph Agnew, to Apr. 29. Agnew was to have assumed the post at Lasmo's annual meeting May 24. Lasmo is counting on Agnew's experiences as chairman and chief executive of Consolidated Goldfields, which successfully fought off a similar bid.

Copyright 1994 Oil & Gas Journal. All Rights Reserved.

ENTERPRISE SEEKS TO ACQUIRE LASMO IN STOCK TRADE

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