Delek Group Ltd. (TASE: DLEKG) controlling shareholder is apparently enamored of his main partner in Yam Tethys and the Tamar and Dalit gas fields offshore from Israel, Noble Energy Inc. (NYSE: NBL). Delek today notified the Tel Aviv Stock Exchange (TASE) that it intends to buy $218 million worth of Noble Energy shares in trades on the New York Stock Exchange.
Delek stated, "The purchases will be made from time to time, at the company's discretion, in transactions on the stock exchange." It added that the purchases "will be made in accordance with the conditions, circumstances, and needs as they occur from time to time, while paying attention to the market climate and company value."
Noble Energy closed at $59.08 yesterday, giving a market cap of $10.24 billion. Delek Group fell 0.3% by mid-afternoon on the TASE to NIS 615, giving a market cap of NIS 7 billion.
On the basis of Noble Energy's current share price and the amount that Delek Group has allocated to buy shares in the company, it will be able to obtain an equity stake of about 2% in Noble Energy. Delek Group has taken a $120 million loan of up to three years from Citigroup Inc. (NYSE: C) for this purpose. The interest rate on the loan is reportedly the prevailing market rate of LIBOR + 3%, for a total of 4.4%.
Delek has already bought $22 million Noble Energy shares using equity.
Delek Group CEO Asaf Bartfeld told "Globes", "Noble Energy has been our partner in natural gas projects in Israel for many years. We believe in its capabilities and management in projects worldwide. They operate with great success in many places."
Published by Globes [online], Israel business news - www.globes-online.com - on August 19, 2009
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