Centrica makes £1.3 billion bid for Venture

By Tom Bergin

LONDON (Reuters) - Britain's largest gas retailer, Centrica, which operates under the British Gas brand, made a $2 billion (1.3 billion pound) bid for North Sea gas producer Venture Production on Friday as it seeks to increase its gas reserves.

Centrica said in a statement it increased its holding in Venture to 29 percent from 23.6 percent with the acquisition of a stake owned by private equity group 3i Group.

The company has offered to buy the rest of Venture for 845 pence a share, valuing the oil and gas explorer at around 1.3 billion pounds.

Venture rejected the bid, saying the offer substantially undervalued the company.

Venture's shares closed at 785 pence on Friday.

Centrica Chief Executive Sam Laidlaw said the offer -- which is below what many analysts and dealers expected -- represented a significant premium over what Venture shares traded at prior to the utility's first approach earlier this year.

"We are today making what we believe to be an attractive offer to Venture shareholders .... We are now making the offer directly to Venture's other shareholders," he said in a statement.

Richard Griffith, an oil analyst at Evo Securities, said earlier on Friday that 950 pence a share was the level he thought Venture management and investors might accept if Centrica made a bid.