Opposition to Offer growingFrom Foresight on the London Board:
By Angelina Rascouet
(Bloomberg) -- Delek Group Ltd.’s proposed takeover of
Ithaca Energy Inc. is facing increased opposition from
shareholders, with an investor owning 1 percent of the oil
explorer seeking a higher offer from the Israeli energy company.
Peter Buchanan, who owns 1 percent of Ithaca shares, said
he opposes the current terms of Delek’s offer. Buchanan is the
former co-founder and chief executive officer of Valiant
Petroleum Plc, which Ithaca bought in 2013.
Delek on Feb. 6 offered to pay Ithaca shareholders C$1.95 a
share, or 120 pence at the time. That represented a 16 percent
premium to the 30-day average price. An offer of 150 pence a
share would be a “sensible premium,” that Buchanan “would be
happy with,” he said in an interview Friday. That’s in line with
what Cavendish Asset Management Ltd. has voiced previously.
Cavendish owns about 3 percent of Ithaca shares.
Investors in Aberdeen, Scotland-based Ithaca have until
April 20 to tender their stock. For the deal to go through,
investors have to tender 50 percent of shares not already owned
by Delek, which owned a stake of close to 20 percent before the
deal was announced.
Delek’s offer came 11 days before Ithaca announced the
production start-up of its delayed Stella project in the U.K.
North Sea. The timing of the offer, coming from an inside
shareholder, was “wrong,” Buchanan said. “Surely you’d wait for
the news to come out, for the market to digest it and to
effectively come up with an undisturbed share price based on
that news,” he said.
Investors owning “well over” 10 percent of outstanding
shares are set to refrain from tendering them, Buchanan said.
“It’s an odd time to sell,” with oil prices rising to “more
reasonable levels” and production at Stella on stream, he said.
Ithaca declined to comment.
Artemis Fund Managers -- the fifth-biggest holder with
about 4.2 percent, according to data compiled by Bloomberg --
described Delek’s offer as “disappointing” at the time of the
announcement but has since not said whether it would back the
deal.
BlackRock Inc. -- the fourth-biggest investor -- declined
to comment. Invesco Ltd. -- the third-biggest investor -- didn’t
immediately reply when asked to comment.
“We continue to view the bid by Delek as a compelling offer
at a 27 percent premium to our valuation of the portfolio based
on a long-term Brent price of $70 a barrel,” James Hosie,
analyst at Barclays Plc, said in a note on Friday.
Brent, the global oil benchmark, was at $52.60 a barrel at
12:19 p.m. in London. The median forecast of analysts surveyed
by Bloomberg sees Brent reaching $70 a barrel from 2021.
Although production at Stella started last month, the ramp-
up in oil output and the start of gas exports has been de