Delek Group to Split with Probable London IPO

Delek is in talks with Goldman Sachs and Wells Fargo to serve as underwriters.

Delek Group Ltd. (TASE: DLEKG) is in advanced talks to sign an agreement with Goldman Sachs and Wells Fargo to serve as underwriters after the company spins off its energy exploration activities and holds an IPO, probably in London, sources inform “Globes.” Delek Group is controlled by Yitzhak Tshuva.

Talks are currently underway in Israel and abroad to agrees on the structure of the split and the various aspects of its financial and tax implications. The plan is to complete the split and the listing in the first half of 2014.

The strategic concept behind the split is to separate Delek’s energy exploration activities held by Delek Energy Systems Ltd. and which include Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling Limited Partnership (TASE:DEDR.L), partners in the major Leviathan and Tamar gas fields, as well as Cohen Development (52%) and Navitas Petroleum, which was set up by Tshuva and Gideon Tadmor to search for oil and gas worldwide.

Delek Group’s other assets including Delek US Holdings Inc. (NYSE:DK), Delek’s gas stations in Israel and Europe,  Delek Automotive Systems Ltd. (TASE: DLEA),  The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5), and US insurance company Republic Companies Group Inc. will remain within Delek Group.

IBI Investment House analyst Guil Bashan told “Globes” that such a split is a strategic-business measure, which is the right thing to do, and would provide Delek with more focused exposure to investors for its energy exploration activities, without the distraction of its other assets, some of which are for sale.


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