Delek seen selling Tamar rather than Leviathan

Yitzhak Tshuva  picture: Bloomberg

The regulator's decision to declare Tamar and Leviathan a monopoly could hit Delek's planned London IPO.

Delek Group Ltd. (TASE: DLEKG) controlling shareholder Yitzhak Tshuva will propose to Israel Antitrust Authority head David Gilo giving up the Tamar gas field and continuing holding the Leviathan field, energy market sources believe. This follows Gilo's decision to backtrack on his previous agreement, subject to a hearing, to let Delek and Noble Energy Inc. (NYSE: NBL) continue holding both the Tamar and Leviathan gas fields.

Gilo now feels Delek and Noble have a monopoly in natural gas production in Israel and will demand splitting ownership of the fields. Following Gilo's decision, the shares of the Leviathan partners, Delek units Avner Oil and Gas LP (TASE: AVNR.L), Delek Drilling Limited Partnership (TASE: DEDR.L) and Ratio Oil Exploration (1992) LP (TASE:RATI.L) fell sharply on the Tel Aviv Stock Exchange.

Gilo's dramatic decision could also halt Delek Group's plans for a major offering on the London Stock Exchange next year. Delek Group sources said, "It's a little bit too early to think about that now. The Group has time to promote the step before April 2015."

However, market sources said that at the very least the turbulence generate by the Antitrust Authority decision means the planned London IPO will be delayed while the capital market digests the significance of this new complex situation.

Delek has been promoting an overseas IPO for the past year as part of its strategy of focusing on energy activities including exploration, production, transport, and marketing, and exiting non-core activities. Delek had considered spinning-off activities but ultimately decided to dual list and raise money in London. The latest regulatory decision now leaves the planned offering in doubt.

Published by Globes [online], Israel business news - www.globes-online.com - on December 23, 2014

© Copyright of Globes Publisher Itonut (1983) Ltd. 2014

Yitzhak Tshuva  picture: Bloomberg
Yitzhak Tshuva picture: Bloomberg
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