Early days Delek have played a blinder
The banks have Ithaca by the balls
C$1.95 is a fair price.
The list goes on ....... we’re doomed I say ..... doomed!
My fellow shareholders - Kensho do you still have your 10% “just in case” and Ferret you crafty rodent, I bet you still have your 25K.
I believe that before my next trip to the beach Delek will own Ithaca but this process still has a long way to go. Delek loves Ithaca. Delek will not walk away without raising their bid. Let’s take stock.
Putting myself in Delek’s shoes:
Phase1
Initiate a negotiated bid for Ithaca, whose largest asset is the GSA hub but has fingers in a number of interesting North Sea assets; Cook, Dons and Pierce, including partnerships with major North Sea players. Look for an entry level which balances the risks with the opportunities. Key risks being the oil price, successful Stella production, and a key opportunity the expansion of the GSA hub. Timing – turn of the year, Ithaca is priced at 99p after recovering from the recent news on Stella delay. OPEC has agreed cut backs supporting a near term expectation of a $55-$60. First oil is imminent, price rising, can’t wait for confirmation on Stella production. Last update: ready to open the Stella pipes and oil tanker contracted (Scott Spirit due on site). It’s time to get this show on the road.
Offer a price at the upper end of the fair price range C$1.6 – C$2.1 provided by First Energy, but below the price we are willing to pay. Set the price expectation but let’s hold off posting the formal documents until we get insight into the initial Stella production numbers and get some feedback from minority shareholders – remember we need 50% of their shares.
Phase 2
The reaction!
Les played his part in the conference call, presenting the bid as a ‘fait accompli’ – we wish – but he didn’t come across as very enthusiastic (that’s our Les). Good job we managed a negotiated bid and didn’t go hostile.
As we hoped a couple of the financial publications (a couple of pundits with no skin in the game) seeing the price at the upper end of the ‘fair valuation’ has recommended our bid. They and others don’t seem to understand the tender mechanism. The FX element is also causing confusion. Let’s keep First Energy and RBC Capital in mind for next year’s listing – they have been fair but supportive.
Unfortunately, two of our largest fellow shareholders, Artemis and Cavendish aren’t supportive calling the bid ‘low ball’. Cavendish went so far as to say they might have considered 150p but would prefer to see Ithaca remain independent. We need a substantial shareholder to come out on our side to form a nucleus of support. Let’s get out there and start talking. Mention we are looking at a listing next year – you know wink-wink.
I wonder what our GSA partners Dyas (25%) and Petrofac (20%) are thinking? Dyas are a shrewd bunch and have been in the North Sea much longer than us (Dyas are familiar with the GSA area licences – think Skerrymore. Measured by production and resources they are bigger than Ithaca.) Stella is 17% of their resource so they’ll be as keen as us to see the Stella production numbers. Les can’t keep the numbers from his shareholders. Good job we kept the option to revise our bid after the initial Stella numbers are known. It could have got very messy coming out during the bid.
Not feeling as good about this as I was last week. Last week we were in control.
The Stella numbers are what!!! The oil price hasn’t moved in our favour. Artemis and Cavendish aren’t budging. Better up the offer and post the documents. Let’s get this 35 day bid cycle rolling.
Phase3
I love Ithaca. I want Ithaca. Give me Ithaca. Pleaseeeeeeee!
Londoner7