Jan 23 (Reuters) - North Sea-focused oil and gas explorer Ithaca Energy Inc on Monday said it received a confidential offer to acquire all of its outstanding shares from an unnamed buyer.
The company's Toronto-listed shares rose 16.5 percent to touch a 10-month high of C$2.89 and were among the top percentage gainers on the exchange. They later pared some gains to trade up at C$2.81.
"Ithaca is a very solid company with a good management team and reasonably good assets. And it was trading significantly below its core net asset value, so it (the takeover offer) doesn't surprise me," said Toby Pierce of GMP Securities.
"It has a strong balance sheet and a good tax-loss position, so it makes for a good candidate for a takeover offer."
The amount of money a company has spent to explore and develop assets can be offset against future taxes. These "tax losses" are beneficial for a buyer currently paying tax on its earnings and can in some cases reduce the cost of an acquisition.
The company did not disclose any financial details nor name the potential buyer, but said talks are at a preliminary stage.
Analyst Pierce said potential buyers could be either privately owned Dana Petroleum or British oil firm EnQuest .
Dana Petroleum is mulling acquisitions and looking for new projects in North Africa to help fulfil an ambitious growth plan, and believes backing from Korea National Oil Company (KNOC), its owner since 2010, will help it outpace its peers.
EnQuest would be interested in Ithaca's production and tax-losses, said Pierce.
The company, which has its registered office in Canada, said it was not subject to the UK City Code on Takeovers and Mergers. So shareholders would not be afforded any protection under the takeover code, the company said in a statement.
"It may accelerate the deadline (of the proposal), as it is subject to Canadian takeover rules as opposed to UK takeover rules because the company's offices are in Canada," Pierce said.
The company, which has offices in Calgary, Canada, and Aberdeen, Scotland, has retained CIBC World Markets as its adviser.
The company's London-listed shares, which have gained 14 percent in the last three months, closed up 26 percent at 182.3522 pence.
Monday, January 23, 2012
Take Over Offer Ithaca Energy Inc
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