RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:The outline presented by Doug2B is very much in line with myDelek do not have the option to buy Ithaca for $1.40. The Ithaca board would not recommend it and very few shareholders would support. The institutional shareholders have taken some risk in buying Ithaca over the past year - single project risk, high debt, uncertain oil price recovery, etc, with a clear view on the return they expect and that is not $1.40.
Delek would do a lot of relationship and credibility damage if they tried for a cheap bid and they know it would fail.
So why not just bid the required $3 now? As previously stated, the bid premium over the current price would be so large that their own shareholders and board would worry about perceptions. Also, and the main reason for waiting is that GSA is de-risking, once the platform leaves Gdanak that is a clear de-risk step, securing the platform at the field is probably takes away the biggest risk and then first oil etc. At each de-risk step the price rises, Delek will most likely wait until the share price goes comfortably past $2 and then bid on a c30% premium to take us to around $3.
So what is Delek's target price? $2.50 is possible although I would be surprised and disappointed at this price, $3.50 to $4 is also possible, c$3 seems most likely.
Doug