Ithaca Energy Inc.’s board is recommending that its shareholders accept a friendly takeover bid from Delek Group Ltd., which is offering to pay C$681 million cash to buy all the Ithaca stock it doesn’t already own.
Ithaca’s main focus is on North Sea oil and gas. Delek, which is developing natural gas reserves in the eastern Mediterranean Sea, already owns 19.7 per cent of Ithaca.
Delek is offering C$1.95 cash per Ithaca share (TSX:IAE), which is 12 per cent above the Friday closing price of C$1.74 on the Toronto Stock Exchange.
In London, where Ithaca shares are also listed, the stock is up about 10 per cent this morning. On the Tel Aviv stock market, Delek shares are up about one per cent.
One condition of the offer is that Delek acquire at least half of the stock that it doesn’t already own, giving it at least 40 per cent equity interest in Ithaca.
All of Ithaca’s directors and officers have agreed to tender their shares, representing 2.6 per cent of Ithaca’s total outstanding stock.
Delek’s offer values Ithaca’s entire share capital at C$841 million.
“The Ithaca transaction will substantially strengthen our international operational arm, and is a synergistic step to our existing activities,” Delek president and CEO Asaf Bartfeld said in a statement from Tel Aviv.