Price raised

Wood rejects second takeover approach from Sidara

Wood House
Wood Group says the latest offer undervalues the company

Wood Group has rejected a second takeover proposal from the Middle East engineering and design group Sidara.

The Aberdeen company disclosed that yesterday it had received an offer of 212p per share, an increase on the 205p offered on 30 April.

The Wood Group board today said Dar Al-Handasah Consultants Shair and Partners Holdings Ltd (Sidara) had made a fresh cash offer representing an increase of approximately 3% to the Initial proposal.

“The board carefully considered the latest proposal, together with its financial advisers, and concluded that it continued to fundamentally undervalue Wood and its future prospects. Accordingly, the board unanimously rejected the latest proposal.”

Shares in Wood Group closed at 187.5p.

Sidara has been given a deadline of 5pm on 5 June to either announce a firm intention to make an offer for the FTSE 250 company or walk away.

The initial proposal represented a 35.5% premium on Wood’s closing price on 30 April.

Both Sidara offers are short of the 240p-a-share that the Wood board rejected from buyout fund Apollo last year before it ended its interest.

It is possible, however, that Apollo may rekindle its interest, sparking a bidding war for Wood run for many years by north east businessman Sir Ian Wood.

Hedge fund and activist shareholder Sparta Capital Management last month urged the engineering giant to consider selling itself.

In a recent trading update, Ken Gilmartin, CEO, said: “We are now in the second year of our growth strategy and are making good progress, with EBITDA growth, margin expansion and an order book 9% higher than a year ago.

“We continue to win exciting and complex work across energy and materials, with sustainable solutions representing 40% of our pipeline.

“I am proud of the strong leadership team we have in place and confident that we will deliver on our significant potential.”

Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.