Israeli energy company Delek Group has launched a takeover offer for the oil company Ithaca Energy.
According to Canada-based Ithaca, the offer is for a cash consideration of C$1.95 per share – this equates to £1.20 per share based on the exchange rate on 3 February 2017. Delek says the offer is $524 million.
Ithaca’s board has unanimously recommended the offer and values the entire issued and to be issued share capital of the company at C$841 million ($646 million).
The target company, with assets in the UK North Sea, said the offer provides shareholders with the opportunity to “crystallise” the value of their holdings in cash and represents a 12% premium to the TSX closing price of C$1.74 per share on 3 February 2017 and a 16% and 27% premium to the 30 day and 60 day volume weighted average prices respectively.
The offer implies a total enterprise value of approximately US$1.24 billion.
Brad Hurtubise, Ithaca’s Non-Executive Chairman, said: “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 favorable point in the Company’s evolution.”
“A Special Committee of independent Directors has fully assessed the offer, with input from the Company’s financial advisor and an independent valuator, and believes the offer is fair and in the best interest of the Company and its shareholders and unanimously recommends that the shareholders tender their shares to the offer.”
Delek plans to finance the offer from its independent sources, inter alia, as per the company’s cash balance and expected cash flows of future assets divestments.
Asaf Bartfeld, President and CEO 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.”
Apart from announcing the takeover offer, Ithaca also provided an update on its Stella development in the UK North Sea. The company said that good progress has been made on completing the remedial work on the FPF-1 electrical junction boxes, with the start-up of production from the Stella field still anticipated “later this month.”
As for the takeover, this is the third major North Sea deal announced in the past month. Late in January BP said it would sell portions of its interests in the Magnus oil field and some associated pipeline infrastructure in the UK northern North Sea and in the Sullom Voe Terminal (SVT) on Shetland to EnQuest.
Last week, Shell agreed to sell “a package” of UK North Sea assets to Chrysaor for a fee of up to $3.8 billion, as part of its previously announced $30 billion divestment program.
Offshore Energy Today Staff