- Wood Group said Dubai-based rival Sidara had made a 35 pence per share bid
John Wood Group looks set to be acquired by Dubai-based rival Sidara in a deal worth a fraction of takeover bids rejected just last year.
The struggling oilfield services provider told investors on Monday that Sidara had made a fresh 35p per share bid, valuing the company at around £240million.
Wood rejected three Sidara offers last year before ultimately accepting a fourth worth £1.6billion.
But after two months of discussions, Sidara walked away, citing ‘rising geopolitical risks and financial market uncertainty’.
And Wood said it is now ‘minded to recommend’ Sidara’s latest offer to shareholders, as the group seeks a ‘more sustainable capital structure’.
It follows an 80 per cent slump in Wood shares over the last 12 months in the wake of profit warnings, significant contract write-offs and accounting failures.
New offer: John Wood Group said Dubai-based rival Sidara had made a 35 pence per share bid, valuing the company at around £240million
Sidara’s latest bid includes a potential $450million capital injection, split into an initial $250million tranche that is dependent on investor approval or posting of the offer document, followed by a further $200million tranche.
Wood would also pursue an extension or amendment to existing debt facilities, most of which are set to mature in October 2026.
The Aberdeen-based group, which employs over 35,000 people across more than 60 countries, said it was working ‘on a range of alternative refinancing options’.
But following talks with financial advisers, it said Sidara’s ‘possible offer represents the better option for Wood’s shareholders, creditors and other stakeholders’.
Wood Group shares jumped 13.7 per cent to 28.4p in early trading, making them the FTSE 250 Index’s biggest riser.
For 2025, the company forecasts lower underlying earnings before nasties, as well as negative free cash flow of between -$150million and -$200million.
In late March, Wood warned that its annual results would probably not be published on time after a review by Deloitte found ‘cultural failings’ led to information being ‘inappropriately’ withheld from auditors.
It also said the probe found ‘inappropriate’ management pressure to uphold previous financial reports, including through ‘unsupported dispensations’.
Wood stated that ‘significant change’ at the firm had occurred since the review, with new external experts hired to assist with implementing accounting standards.
Russ Mould, investment director at AJ Bell, said: ‘Once a big success story in the UK energy industry, Wood Group looks set to succumb to a pretty sorry end, although shareholders may be only too willing to draw a line at this point given the company’s recent struggles.
‘Beggars cannot be choosers, and such is Wood Group’s perilous position it has little choice but to accept what is on offer, particularly given Sidara is pitching a potential capital injection as part of the agreement.’
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Saxo
Saxo
Get £200 back in trading fees
Trading 212
Trading 212
Free dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
This article was originally published by a www.dailymail.co.uk . Read the Original article here. .