ONE of the founders of Centrica target Venture Production has urged fellow shareholders to hold out for at least £1.5bn from the British Gas owner.

With a 7.4 per stake in the North Sea oil and gas company, Larry Kinch said the strength of Aberdeen-based Venture’s portfolio meant investors should take a longer-term view or demand a price that compensates them properly.

The comments from Mr Kinch, who is a non-executive director, emerged after Centrica’s £1.3bn offer for Venture was rejected by the board’s management on Friday evening as “substantially undervaluing” the business.

Centrica, which first took a stake in Venture in March and is also expected to gain a stake in the company which owns Hartlepool Power Station, has a 29 per cent stake in Venture after picking up private equity firm 3i’s 5.4 per cent share.

It will now seek to win over other major shareholders including Legal and General, which owns 4.3 per cent, Axa, which holds 3.4 per cent, and JP Morgan, the owner of a 3.3 per cent stake. However, it emerged yesterday that US investment firm ArcLight, which manages a 3.4 per cent stake in Venture, supported the board’s rejection. Centrica wants to buy the firm to boost its gas production and reduce its dependence on volatile wholesale markets.

Venture is an exploration and production company which acquires, develops and brings into production discovered but undeveloped oil and gas fields in the North Sea.

It produced nearly 53,000 barrels of oil equivalent per day during the first six months of this year, reporting an “excellent first half”.

Last year, the firm virtually doubled operating profits to £231m with revenues up 38 per cent to £494.9m after higher production levels and commodity prices.

Centrica can produce about 35 per cent of its energy needs out of its own resources, although this should increase to 45 per cent when it completes the acquisition of a 20 per cent stake in nuclear power firm British Energy, owner of Hartlepool Power Station, from French energy firm EDF.

Buying Venture would mean that Centrica could supply 60 per cent of its energy from its own assets and resources.

Centrica said the deal – which comes at an 87 per cent premium to Venture’s share price in January – offered “compelling” value for the shareholders and would protect them from a possible impact of falling gas prices.

Venture’s chief executive Mike Wagstaff called Centrica’s approach “opportunistic” and said: “In no way does this offer recognise the strategic position and high quality of our gas reserves and resources.”