* Delek agrees deal to take full control of Ithaca
* Ithaca investor Cavendish says offer too low
* Latest deal to target North Sea assets
* Israel's Delek prepares London listing (Adds shareholder comment)
By Tova Cohen and Karolin Schaps
TEL AVIV/LONDON, Feb 6 (Reuters) - Israel's Delek Group has agreed to buy Ithaca Energy Inc in adeal valuing the North Sea oil producer's equity at $646 millionand building on Delek's expansion in the North Sea ahead of aplanned London listing.
The deal follows a number of transactions in the BritishNorth Sea after a rise in oil prices above $50 a barrel hasgiven confidence to buyers and sellers to agree on valuations.
Ithaca, listed in Toronto and London, said on Mondayits board had recommended the Israeli conglomerate's cash offerof C$1.95 per share, which equates to 1.20 pounds. Delek, withnatural gas exploration and production activities in the easternMediterranean, already owns 19.7 percent of Ithaca.
However, Cavendish Asset Management, which owns around 3percent of Ithaca and is its fourth-largest investor, said theoffer was too low, considering the potential of Ithaca's newestfield, Greater Stella, which comes on stream later this month.
"As things stand I would be voting against it unlesssomething crops up in the meantime to convince me otherwise,"Cavendish fund manager Paul Mumford told Reuters.
The deal requires that holders of more than 50 percent ofshares not held by Delek accept the offer.
At 1355 GMT, Ithaca's London-listed shares were up 10.7percent at 119.25 pence, after touching 121 pence, their highestsince September 2014.
Delek's offer, a premium of about 12 percent to Ithaca'sclosing price of C$1.74 on Friday, implies an enterprise value -including debt - of about $1.24 billion.
The offer is the latest in a string of North Sea deals afterlast week Chrysaor, backed by private equity, said it would buymany of Shell's North Sea assets for up to $3.8 billionand EnQuest agreed to buy a 25 percent stake in BP's Magnus oil field.
Delek itself bought a 13.18 percent stake in Faroe Petroleum, another North Sea operator, for 43 million pounds ($53.7 million) in December.
Delek's bid for the 80 percent of Ithaca it does not alreadyown is worth $524 million.
"This is a full and fair offer from a very credible buyerwho have the financial resources to complete the transaction,"Ithaca Chief Executive Les Thomas told Reuters.
LONDON LISTING
Delek Chief Executive Asaf Bartfeld said the deal wouldcontribute to the company's growth and to solidifying itsposition in the international market.
A spokesman for Delek said the company planned to list inLondon during 2017 but could not say whether new shares would besold or give further details.
In August, Delek said it was considering spinning off itsholdings in the large Tamar natural gas field offshore Israelinto a separate company traded abroad.
Under a deal reached with the Israeli government to boostcompetition in the sector, Delek has about five years to sellits 31.25 percent stake in the field.
Ithaca is a partner in 25 projects and is the operator in 12of them, including the Stella field in the North Sea. Delek saidStella would be a big step up for Ithaca in terms of productionamounts.
"This looks like a reasonable price, although Delek isclearly retaining some upside, particularly around Ithaca's 'predevelopment' portfolio as well as its attractive tax lossposition," BMO Capital Markets analyst David Round said in aresearch note.
($1 = 0.8030 pounds) (Additional reporting by Noor Zainab Hussain in Bengaluru;Editing by Adrian Croft and Mark Potter)