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Wednesday, 9 January, 2002, 07:45 GMT
Enterprise Oil rejects bid approach
Enterprise Oil rig
The UK independent oil producer, Enterprise Oil, has turned down a takeover approach, probably from the acquisitive Italian energy giant ENI, industry sources said.

Shares in the independent UK oil company rose more than 20% in late trade on Tuesday following news of the approach.

At Tuesday's market close, the company was valued at just over 2.9bn ($4.06bn).

Since the start of the year, Enterprise Oil's share price has risen on speculation that it could be a bid target.

But the company - one of the UK's few remaining independent oil firms - has previously seemed determined to avoid the consolidation which has swept through the rest of the industry.

In a statement on Tuesday, the company confirmed that it had "recently received an unsolicited approach from a third party regarding a possible offer for the company, which has been rejected."

It gave no further details of the approach and did not name the bidder.

Several potential bidders

Analysts say the depressed share prices seen in recent months have made it cheaper for oil companies to expand through takeovers rather than organic expansion.

And there appear to be several potential bidders for Enterprise.

ENI, which bought Lasmo in 2000 for 2.7bn, and partners Enterprise Oil in Italy, may be the winner.

But other names mentioned as possible suitors have included the Canadian firm Talisman Energy and the US -based firms Amerada Hess and Conoco.

"It could be any number of companies with sufficiently deep pockets," said Tony Alves, oil analyst at Investec bank.

"Enterprise is a high quality company which has been trading at a very low valuation relative to its assets and growth potential."

Enterprise Oil was founded from the main oil assets of British Gas - the former state-owned UK gas supplier which was privatised in 1983.

The group operates fields in the UK, Ireland, Norway, Denmark, Italy and the Gulf of Mexico.

The BBC's Neil Bennett
"This could be competitive"
See also:

04 Jan 02 | Business
Oil prices rocket
31 Dec 01 | Business
Tide turns against the oil firms
28 Dec 01 | Business
Opec cuts exports to boost prices
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