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Delek Group said on Monday that it has signed an agreement with Ithaca Energy to make an all cash $524 million takeover offer.

The Israel-based company said it has signed an agreement with Ithaca that calls for Delek to make an offer to purchase from all of Ithaca’s share capital that is not held by Ithaca.

Delek said that either it or one of its foreign subsidiaries will issue the cash takeover bid.

The deal calls for each share to be purchased for $0.76 per share (CAD 1.95 per share) with the total consideration being worth $524 million.

That price reflects a 12 percent premium on the Toronto Stock Exchange closing price of Ithaca’s shares as of February 3, 2017.

Ithaca is an independent UK oil and gas operator that owns producing oil and gas assets and assets under development.

Delek, through a wholly-owned foreign subsidiary, currently holds a 19.7 percent of Ithaca’s share capital.

If the offer is completed, Delek will be the controlling shareholder of Ithaca.

Ithaca said its board of directors, excluding Delek related party directors, have unanimously recommended the takeover.

“A Special Committee of independent Directors has fully assessed the Offer, with input from the Company’s financial advisor and an independent valuator, and believes the Offer is fair and in the best interest of the Company and its shareholders and unanimously recommends that the shareholders tender their shares to the Offer,” Ithaca non-executive chairman Brad Hurtubise said.

The share capital included in the deal includes shares arising from exercising convertible securities.

Ithaca’s market value as of February 3, excluding convertible securities, was $555 million (CAD 720 million).

Delek said it intends to finance the offer from its independent sources, inter alia, as per the company’s cash balance and expected cash flows of future assets divestments.

“The Ithaca transaction will substantially strengthen our international operational arm, and is a synergistic step to our existing activities. We believe Ithaca will contribute to our continued growth and we look forward to reinforcing and building on our status in international markets,” Delek Group CEO and president Asaf Bartfeld.