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Eni trumps Hess bid
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December 21, 2000: 10:28 a.m. ET
Italian oil firm outbids Amerada Hess in battle for U.K.'s Lasmo
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LONDON (CNNfn) - Heavyweight Italian energy company Eni trumped a U.S. bid for Lasmo PLC, Britain's No. 1 independent oil firm, offering £2.7 billion ($4.0 billion) in cash Thursday.
Eni said it would pay 200 pence a share for Lasmo, some 12 percent more than the price Amerada Hess Corp. (AHC: Research, Estimates) offered in November. Lasmo's board recommended investors accept the new offer, saying it offered "maximum value" for shareholders.
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 HOW DOES LASMO SHAPE UP?
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Net proved oil and gas reserves of 830m barrels
Average daily production of 178,000 barrels
Principal areas of activity: UK, Netherlands, Indonesia, Venezuela, Algeria, Pakistan
Revenue £594m ($878m) in 1999
Pretax profit £170m ($251m) before one-time items
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The Eni offer is 42 percent above Lasmo's share price before it disclosed that it was in talks with Amerada. The U.S. company offered £98.29 cash and 1 new Amerada Hess share for every 78.7 shares that Lasmo investors currently own, in a bid that industry analysts described as generous. The buyer would also have to assume the British firm's £1.1 debts.
An analyst told CNNfn.com the Eni offer is a "knockout bid", with Amerada unlikely to come back with a higher offer. Eni has already received irrevocable undertakings from institutional shareholders representing 25 percent of Lasmo's capital.
"Eni had always been regarded as a likely predator," said oil analyst Peter Hitchens at brokerage Williams de Broe, though he admitted the timing of  the bid came as a surprise. Hitchens said Eni was desperate to expand overseas by acquiring companies because its domestic market share was being squeezed.
Lasmo (LSMR) stock bolted up 12 percent to 199 pence in London Thursday afternoon. Eni shares fell 1.4 percent to  6.66 in Milan.
Eni has cash to burn. The state-controlled firm is the world's seventh-largest oil firm, with a market value of some 54 billion ($49.1 billion), but has not managed to pull off any significant deals to help it keep pace with expanding industry leaders such as BP Amoco PLC (BPA) and Exxon-Mobil Corp (XOM: Research, Estimates).
Amerada virtually conceded the battle Thursday afternoon, issuing a statement indicating it "does not intend to revise the terms of its cash and stock offer for Lasmo." 
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Lasmo
Amerada Hess
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