NewMed acquisition talks with ADNOC, BP suspended

Leviathan platform  credit: Albatross
Leviathan platform credit: Albatross

"Had it not been for the war, there would have been a deal,” a source familiar with the details told “Globes”.

Five months after the outbreak of the Swords of Iron war, NewMed Energy Limited Partnership (TASE: NWMD) notified the Tel Aviv Stock Exchange this morning that the committee that it formed to examine the proposed deal for the acquisition of a 50% stake by British Petroleum (BP) and Abu Dhabi National Oil Company (ADNOC) had agreed with the latter two companies to suspend the discussions.

"The consortium again expressed interest in the proposed deal," NewMed said in its statement. "The process will be suspended until a date when the discussions will be renewed or the process will be ended. There is no certainty that the discussions will be renewed, or that an agreement will be reached in the future, nor is there any certainty over the terms of any deal that might be reached. The partners will update the holders of the participation units about further developments, as required."

"Had it not been for the war, there would have been a deal," a source familiar with the details told "Globes". "The regional situation led to the suspension, and there is still interest in closing a deal. When things calm down in the region, the deal could yet be closed."

Even in the week before the war began, the negotiations were unsettled when the NewMed committee recommended raising the consideration in the deal, which had been estimated at $7 billion, by 10-12%. The partnership sought to justify this by the sharp rise in oil and gas prices and the weakening of the shekel against the US dollar since the initial offer had been received six months previously.

NewMed holds 45% of Israel’s largest gas reservoir, Leviathan. In March last year, it announced that it had received "a non-binding indicative offer" from BP and ADNOC to buy half the rights in the partnership at a valuation of NIS 14 billion, which represented a premium of 65% on the market value of the participation units at the time.

The two international energy giants offered to pay cash for all the participation units held by the public, representing 45% of the partnership, and to buy 5% from Delek Group, controlled by Yitzhak Tshuva, which would have given them 50% (in equal shares), while Delek Group would have held the other 50%.

Suspension of the acquisition talks mean that, for the time being, NewMed will remain publicly traded.

Published by Globes, Israel business news - - on March 13, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Leviathan platform  credit: Albatross
Leviathan platform credit: Albatross
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