Shares in John Wood Group close up nearly 17% after the company told the City it had rebuffed a takeover approach which valued the Aberdeen-based engineering giant at £1.42 billion.
The company declared it had received an “unsolicited, preliminary, and conditional proposal” from Dubai-based rival Sidara on Wednesday which “fundamentally undervalued Wood and its future prospects”. The 205p per share offer represented a 35.5% premium to Wood’s closing price when it was made on April 30.
Wood said in a statement today: “The Board of Wood notes recent speculation and confirms that it received an unsolicited, preliminary and conditional proposal from Dar Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara"), regarding a possible cash offer to acquire the entire issued and to be issued ordinary share capital of Wood (the "Proposal").
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“The Proposal was received on 30 April 2024 and proposed an offer price of 205 pence per Wood share. The Board carefully considered the Proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects. Accordingly, the Board rejected the Proposal unanimously on 8 May 2024.
“There can be no certainty that any offer will be made for the company, nor as to the terms of any such offer, should one be made.”
Sidara, which has around 20,000 employees across 60 countries, noted the announcement from Wood and said it was "considering its next steps".
The company, which generates nearly half of its revenues in North America, said: "Sidara has a strong focus on value discipline and returns, and has a track record of growing acquired businesses.
"Further announcements will be made in due course as appropriate, but there can be no certainty that an offer will ultimately be made."
The latest approach comes shortly after Sparta Capital, a significant investor in Wood, said directors should consider selling the firm. Sparta said a sale would be the best way to achieve a fair valuation for the business after seeing shares plunge to near-record lows. Other possibilities highlighted by Sparta included moving Wood’s listing to the US stock exchange in the hope the firm could achieve a wider following.
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The company was the subject of five takeover proposals from US private equity group Apollo last year. Apollo had been prepared to pay £1.7bn for Wood but ultimately walked away from the bidding process.
Wood employs around 4,500 people in Aberdeen and its North Sea operations. It has a 35,000-strong global workforce.
The company is due to report results for the first quarter to the City on Thursday (May 9).
Shares closed up 16.9%, or 27.9p, at 192.9p.
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