Delek Group Ltd. (TASE: DLEKG) has notified the Tel Aviv Stock Exchange (TASE) that it has signed an agreement with Canadian company Ithaca Energy Inc. (TSX: IAE; AIM: IAE) to buy the company's shares.
Ithaca is engaged in energy exploration and production in the North Sea and has major experience as an oil and gas field operator. Israeli energy company Delek, controlled by Yitzhak Tshuva, already has a 20% stake in Ithaca and is its largest minority shareholder.
The shareholders of the remaining 80% are being asked to sell their shares to Delek for C$1.95 per share, a 12% premium on Friday's closing price, for a total of C$681 million (US$524 million). The Board of Directors of Ithaca has unanimously recommended accepting the offer.
Ithaca chairman Brad Hurtubise, 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."
He added, "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."
The acquisition is part of Delek's strategy to focus on energy exploration and production and expand its international operations beyond its Eastern Mediterranean operations offshore from Israel and Cyprus. Delek says it will finance the acquisition from its own sources and cash reserves and cash flow expected from operations and the sale of assets.
Delek Group president and CEO Asaf Bartfeld said, "This is a major step forward today in consolidating Delek Group as an international energy company with the ability to explore, produce and drill for oil and gas assets. This latest deal will significantly strengthen the operative arm of the group, which will represent complementary and synergetic activities to Delek's existing operations and allow us to expand Delek Group's international operations and its range of operational capabilities. It will contribute to the continued growth of the group and consolidate our position in the international market."
Published by Globes [online], Israel business news - www.globes-online.com - on February 6, 2017
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