Israel's Delek agrees to buy Canada's Ithaca Energy
Reuters
Published Feb 06, 2017 09:53
Israel's Delek agrees to buy Canada's Ithaca Energy
(Reuters) - Israel's Delek Group (TA:DLEKG) said it had offered $524 million for the 80 percent of shares in oil producer Ithaca Energy Inc (TO:IAE) it does not already own as it seeks to build up its North Sea assets ahead of a planned London listing.
Ithaca, listed in Toronto and London, said on Monday its board had recommended the Israeli conglomerate's cash offer of C$1.95 per share, which equates to 1.20 pounds.
The offer, a premium of about 12 percent to Ithaca's closing price of C$1.74 on Friday, implies an enterprise value of about $1.24 billion, Ithaca said.
Ithaca has its headquarters in the Scottish city of Aberdeen and is focused on North Sea oil and gas.
Delek bought a 13.18 percent stake in Faroe Petroleum (L:FPM), another North Sea operator, for 43 million pounds ($53.7 million) in December.
Delek, with natural gas exploration and production activities in the eastern Mediterranean, already owns 19.7 percent of Ithaca.
The bid values the entire company at $646 million and is conditional upon more than 50 percent of shares not held by Delek taking up the offer.
A spokesman for Delek said the company plans to list in London during 2017 but could not say whether new shares would be sold.
Delek Chief Executive Asaf Bartfeld said the deal would contribute to the company's growth and to solidifying its position in the international market.
"The Ithaca transaction will substantially strengthen our international operational arm and is a synergistic step to our existing activities," he said in a statement.
Ithaca is a partner in 25 projects and is the operator in 12 of them, including the Stella field in the North Sea which is expected to begin production later this month. Delek said Stella will be a big step up for Ithaca in terms of production amounts.
BMO Capital Markets analyst David Round said Ithaca has always been seen as a takeover candidate.
"This looks like a reasonable price, although Delek is clearly retaining some upside, particularly around Ithaca's 'pre development' portfolio as well as its attractive tax loss position," Round said in a research note. ($1 = 0.8030 pounds)
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.