UK’s John Wood Group ‘discussing’ Sidara’s possible takeover proposal

UK-based John Wood Group, said on June 6 that its board would discuss the refreshed offer made by Dubai-based Dar Al-Handasah group also known as Sidara, and allow the engineering and consulting firm access to due diligence materials.

Shares in Wood rose nearly 10 per cent in early trade to 205 pence on Thursday, reported Reuters.

The British firm’s willingness to allow Sidara access to its financials comes after Sidara raised its proposed takeover offer for the third time, saying the cash offer of 230 pence for a share was its “final offer”.

The UK’s Takeover Panel has granted Sidara until July 3 to either announce a firm intention to make an offer for Wood or walk away under the “put up or shut up” (PUSU) UK takeover rules, Wood Group said on Wednesday.

Sidara’s previous offers were rejected by Wood.

John Wood’s low share price luring investors

Earlier in May, the British oilfield services and engineering firm, rejected an initial GBP1.4bn takeover offer from its Gulf rival, calling the offer “fundamentally undervalued”.

News of a possible takeover was confirmed by the Wood board in May, which released a statement about being approached by Sidara with a proposed price of 205 pence a share. It added that the ‘unsolicited offer’ was unanimously rebuffed by the board. The London-listed company said it had not engaged with Sidara since its first approach was made.

“The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects,” it said. The Aberdeen-headquartered oil industry services firm’s share price is well below its pre-pandemic levels of about 600 pence a share.

Furthermore, Sidara’s recent offer comes a year after a similar proposal by US-based private equity firm Apollo Global Management. The American PE made multiple attempts and offers but, abandoned its efforts after a final bid of 240 pence for a share.

According to reports, the Wood group suffered a dip in its market valuation after its investor, Sparta Capital Management, called on its board to “actively seek alternative solutions” in relation to its share price performance.

Sparta’s founder Franck Tuil, said, “It might be time to recognise that the next chapter of Wood’s journey could be best supported by different owners”, and urged the group to “explore the best way to maximise shareholder value, including a sale of the company”.

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