Enterprise Oil has rejected an unsolicited offer from ENI after receiving an approach from the Italian oil giant at the end of last year.
Shares in Enterprise jumped 21 per cent yesterday after the company announced it had turned down an "unsolicited approach". Although Enterprise did not name its suitor, the offer is understood to have come from ENI.
According to people close to the talks, the approach was made last year, and there are no current discussions. However, disclosure of the approach, which was prompted by a rise in Enterprise's share price, is expected to spark a flurry of interest in the oil group.
Enterprise has long been seen as a takeover target as the oil industry consolidates. It said the approach was "not a formal offer", and was probably "opportunistic", as it was made when the oil price was lower than it is now.
The approach came a few months before Mr Sam Laidlaw, Enterprise's new chief executive, is due to explain his strategy for the company.
ENI could not be reached for comment on the offer. However, the company, which is advised by Rothschild, has positioned itself as an aggressive buyer of oil assets in Europe. Last year, ENI outbid Amerada Hess, the US oil and gas group, for control of Lasmo, the independent UK producer. Amerada, which is Mr Laidlaw's former employer, is also seen as a possible bidder for Enterprise.
At last night's closing price Enterprise, advised by Lazard, was valued at around £2.9 billion sterling (€4.7 billion). Over the past five years, the company has underperformed the Datastream world oil exploration and production index by 23 per cent.
ENI and Enterprise are partners in the Val d'Agri onshore field in Italy, which recently came on stream. Ms Caroline Cook, of Deutsche Bank, yesterday said ENI would have an advantage in valuing Enterprise because it has access to information about the field which would not be available to other potential bidders.
Enterprise has experienced a series of delays and missed production targets in Italy over the last five years. Its investments in North America, concentrated in the Gulf of Mexico, have also been judged a disappointment. The company also operates in Ireland - where it is leading the Corrib gas field development - and in Norway, Denmark, and Britain.
