Wood Group Rejects Third Acquisition Proposal from Sidara

Wood Group (LON: WG.) announced Friday that it had received a third unsolicited, preliminary and conditional proposal from Dar Al-Handasah Consultants Shair and Partners Holdings Ltd (Sidara) on Tuesday. 

The new cash proposal was 220p per Wood share, representing an increase of approximately 3.8% to the previous proposal of 212p per Wood share submitted on May 14, 2024. 

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Following the rejection of the previous proposal, which was an increase of approximately 3.4% to the initial proposal of 205p submitted on April 30, Wood Group shares fell more than 7%. 

Wood Group’s board said it carefully considered the latest proposal, particularly in the context of the board’s view of Wood’s fundamental prospects, and concluded that it “continued to significantly undervalue the Group and its prospects.”

As a result, the company unanimously rejected the proposal. 

Under takeover rules, Sidara has until 5pm on June 5 to announce a firm intention to make an offer for Wood Group or walk away.

In May last year, Apollo Global walked away from plans to make a takeover offer for Wood Group.

Last year, after Apollo walked away, analysts at Jefferies upgraded Wood Group to Buy from Hold with a price target of 210p, down from 237p. 

The firm said that it felt one reason Apollo did not make an offer for Wood was based on “bonding” once off-balance sheet performance bonds facilities were factored in. According to the firm, performance bonds are “a little understood but essential part of Wood’s business.”