Ithaca Energy – an Aberdeen-based oil exploration company – has recommended a $1.2 billion take-over for the company by the major energy and utility company in Israel.
Under the proposed deal the Israeli-listed Delek Group will increase its 19% shareholding with a cash takeover offer. Delek proposes to buy Ithaca for 120p per share.
The offer values Ithaca’s equity at $646 million and gives the company an enterprise value of $1.24 billion.
The bid has been unanimously recommended by the board at Ithaca Energy, which is dual-listed on the Toronto and London Stock Exchanges.
The Delek Group acquired 20% of Ithaca Energy – becoming the largest shareholder – in October 2015 and is entitled to two board seats on the Aberdeen board.
But the deal requires that holders of more than 50 percent of shares not held by Delek accept the offer by the closing date in March 2017.
Delek’s bid for the 80 percent of Ithaca it does not already own is worth $524 million.
The Delek Group – Israel’s dominant integrated energy company – is pioneering natural gas exploration and production activities that are transforming the Eastern Mediterranean’s Levant Basin into one of the energy industry’s most promising emerging regions.
Having discovered Tamar and Leviathan, two of the world’s largest natural gas finds since 2000, Delek is now further developing a balanced portfolio of exploration, development and production assets – including those in the N. Sea as some of the major oil companies begin their retreat from the ageing basin.
The Delek offer is the latest in a string of North Sea deals after last week Chrysaor, backed by private equity, said it would buy many of Shell’s North Sea assets for up to $3.8 billion and EnQuest agreed to buy a 25 percent stake in BP’s Magnus oil field.
Delek itself bought a 13.18 percent stake in Faroe Petroleum another North Sea operator, for £43 million pounds in December 2016.
Asaf Bartfeld, President and Chief Executive of Delek Group: “Today, we are taking another significant step which, if successful, will firmly establish Delek Group as a global E&P company, with international oil and gas assets and strong operational capabilities.
“The Ithaca transaction will substantially strengthen our international operational arm, and is a synergistic step to our existing activities. We believe Ithaca will contribute to our continued growth and we look forward to reinforcing and building on our status in international markets.”
Brad Hurtubise, Non-Executive Chairman, Ithaca Energy, commented: “We are very pleased to announce the Offer, which provides an attractive opportunity for all shareholders to secure a premium cash value for their investment following a sustained period of share price growth and at a favourable point in the company’s evolution.”
All Ithaca’s directors have entered into lock-up agreements under which they have irrevocably undertaken to tender their own beneficial shareholdings in the company, representing approximately 2.6% of the entire issued and to be issued common shares.