Enterprise slims to fight takeover

ENTERPRISE Oil is preparing to slash up to one third of its London workforce as part of a drastic cost-cutting programme aimed at fighting off a potential £3.4bn bid from Italian oil group Eni.

Enterprise wants to cut total costs by 25% and sees a substantial reduction in its 300-strong London workforce as a key part of the drive.

The job losses are expected to be announced when Enterprise unveils the findings of its strategic review with its 2001 results on 5 February. The cuts are expected to be restricted initially to the London workforce although significant reductions are also considered inevitable among 400 employed outside Britain.

An Enterprise spokesman declined to comment on the extent of the cost-saving measures saying consultation with staff had just begun. But chief executive Sam Laidlaw is understood to have drawn up firm plans.

The cutbacks, expected to involve Enterprise quitting its deep-water project in the Gulf of Mexico and its Iranian operations, are being finalised amid growing speculation that Eni is about to start mustering support for an offer among Enterprise's institutional shareholders.

Eni is believed to have indicated it is willing to bid 700p a share for Enterprise, but only if it is virtually guaranteed to have the support of the company's leading investors. Most City analysts believe Eni would have little difficulty snatching control of the FTSE 100 oil producer with a bid pitched at more than 650p, particularly given that the shares stood at 430p just a fortnight ago and are at 610p, down 2p, today.

Enterprise's refusal to open takeover talks with its potential suitor has angered several of the institutions on its register who want details of the approach.

A bid of 700p a share would prove bountiful for Enterprise directors, who stand to make profits on shares and options of about £6m between them.

This excludes any shares held by the recently-appointed Laidlaw, whose salary package will not be revealed until Enterprise publishes its next annual report in March.