Ithaca Energy's London listing could value the company at up to 3.1 billion pounds ($3.56 billion), bookrunners said on Nov. 2, after books were swiftly covered following the launch of what is set to be London's largest IPO this year.
Shares in the North Sea oil and gas producer are being offered at 250 pence to 310 pence, implying a market value of 2.5 billion pounds to 3.1 billion pounds ($2.87 billion to $3.56 billion).
Ithaca, which produced about 66,700 boe/d in the first half of the year, is expected to float next week in a rare sign of life in Europe's market for new listings, where activity has plummeted since the outbreak of war between Russia and Ukraine.
Porsche's listing in September ranks as the only other notable initial public offering in 2022 and proceeds from ECM deals in Europe dropped 82% to $8 billion in the third quarter of the year.
There is renewed interest in the North Sea region due to the energy crisis, with Britain recently launching its first oil and gas exploration licensing round since 2019 in an effort to boost domestic production.
Investors are focused on Ithaca's dividend yield, with the price range corresponding to a dividend yield of 11.3%-14% for 2023, a bookrunner involved said.
Ithaca’s main peers include Var Energi, Aker BP, Harbour Energy and Energean.
Ithaca, owned by Tel Aviv-listed Delek Group, expects to be eligible for inclusion in the FTSE U.K. indices.
The company is aiming for a slim free-float of 12%, making use of a change to listing requirements implemented last year by the London Stock Exchange that reduced the amount of shares an issuer is required to have in public hands from 25% to 10%.
Bookbuilding will run until Nov. 8 with the first day of trading on Nov. 9. Proceeds of the share sale will be used to pay down Ithaca's debt, with owner Delek looking to cut its stake while remaining a controlling shareholder.
Goldman Sachs and Morgan Stanley are joint global coordinators on the deal while HSBC, Jefferies and Bank of America are joint bookrunners, with ING acting as co-lead manager.
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