Delek Group, an Israeli energy company, said Monday it put more than $520 million on the table to take over rival oil producer Ithaca Energy Inc.
Delek Group controls just less than 20 percent of Ithaca already and offered $524 million for the remaining stake. The Israeli company said in an assurance to Ithaca shareholders that it had the funds necessary for the cash consideration.
Delek Group President and CEO Asaf Bartfeld said the acquisition would secure his company's position as a leader in the North Sea.
"The Ithaca transaction will substantially strengthen our international operational arm, and is a synergistic step to our existing activities," he said in a statement. "We believe Ithaca will contribute to our continued growth and we look forward to reinforcing and building on our status in international markets."
Ithaca's board of directors said they were unanimous in their recommendation of the merger with Delek. The company in a statement said it would "crystallize" the value of their holdings.
Brad Hurtubise, the non-executive chairman, for Ithaca said the offer came at the right time for his company.
"We are very pleased to announce the offer, which provides an attractive opportunity for all shareholders to secure a premium cash value for their investment following a sustained period of share price growth and at a favorable point in the company's evolution," he said.
In a guidance statement published in January, Ithaca said it expected to produce an average of 20,500 barrels of oil equivalent per day this year. Focused in part on development drilling in the central waters of the North Sea, Ithaca said it envisioned capital spending for 2017 of about $70 million.
Delek is a major player in natural gas reserves off the coast of Israel.
