Israel's Delek expands in North Sea with Ithaca Energy deal
By Tova Cohen and Karolin Schaps
TEL AVIV/LONDON (Reuters) - Israel's Delek Group has agreed to buy Ithaca Energy Inc in a deal valuing the North Sea oil producer's equity at $646 million and building on Delek's expansion in the North Sea ahead of a planned London listing.
The deal follows a number of transactions in the British North Sea after a rise in oil prices above $50 a barrel has given confidence to buyers and sellers to agree on valuations.
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. Delek, with natural gas exploration and production activities in the eastern Mediterranean, already owns 19.7 percent of Ithaca.
However, two of Ithaca's largest shareholders, Artemis Investment Management and Cavendish Asset Management which together own around 8 percent of the stock, said the offer was too low, considering the potential of Ithaca's newest field, Greater Stella, which comes on stream later this month.
"We would like to have a chat with the management of the company to understand why they recommended a bid which we see as disappointing," Mark Niznik, co-manager of the Artemis UK Smaller Companies Fund, told Reuters.
The deal requires that holders of more than 50 percent of shares not held by Delek accept the offer.
"As things stand I would be voting against it unless something crops up in the meantime to convince me otherwise," Cavendish fund manager Paul Mumford told Reuters.
In late trade, Ithaca's London-listed shares were up 10.2 percent at 118.8 pence, after touching 121 pence, their highest since September 2014. Continued...