Ithaca Board recommends shareholders accept $646m deal
Companies: Ithaca Energy
Ithaca Energy Inc. on Monday announced that it has received a takeover offer from Delek Group Ltd and is recommending Investors accept the $646m deal.
Delek Group has reportedly made a cash offer for all issued shares at C$1.95 per share (£1.20). The offer represents a 12% premium to Friday's close, which might seem modest, but the share price has increased 500% in the past year. The fact the offer of only a 12% premium has been recommended by the Board suggests the shares had gotten ahead of themselves following their incredible rise last year.
The offer has been unanimously recommended by the Board of Directors of Ithaca Energy, and according to the Group would:
"...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 is also a substantial premium to the average analyst consensus target price of $1.60 per share.
Delek is an Israeli listed firm with significant natural gas exploration and production activities in the Mediterranean and currently already holds 19.7% of Ithaca shares.
Non-Exec Chairman Brad Hurtubise said he was "very pleased" to announce the offer which provided an attractive opportunity to all shareholders and a premium for their investment following a sustained period of share growth:
"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."
Ithaca's share price opened up on Monday and is up 500% since last January.