- Sidara submitted a proposal at the end of May valuing Wood Group at around £1.6bn.
- Shares of John Wood Group were up nearly 10% early Thursday afternoon.
John Wood Group shares soared on Thursday after the oilfield services group agreed to enter takeover talks with suitor Sidara.
Dubai-based engineering firm Sidara, which has made a fourth takeover bid for the London-listed company, has said this bid will be its “final” attempt to buy Wood Group.
Sidara submitted a 230p-per-share takeover proposal at the end of May, valuing the Scottish company at around £1.6bn.
Three of its previous bids (worth 205p, 212p and 220p per share respectively) were rejected by Wood Group, which said they undervalued the business and its future prospects.
Acquisition target: John Wood Group received a £1.6bn takeover proposal at the end of May from Dubai-based engineering firm Sidara.
Wood Group bosses said they remain confident in their company’s “strategic direction and fundamental prospects.”
However, following the response from shareholders, the group decided to collaborate with Sidara to evaluate whether a specific offer can be “presented under the same financial conditions” as the last proposal.
It said: “There can be no certainty that an offer will be made.” Further announcements will be made as appropriate.’
After this update, John Wood Group Shares rose 9.6 per cent to 203.8p in early afternoon trading, making it by far the biggest gainer on the FTSE 250 index.
Under takeover rules, Sidara now has until 5pm on July 3 to declare its firm intention to bid or withdraw.
Headquartered in Aberdeen, Wood Group employs more than 35,000 people in 60 countries providing consulting and engineering services to the energy and materials sectors.
In its latest annual results, the company reported returning to an operating profit of $38 million due to the absence of impairment charges.
At the same time, its overall revenue grew 8.7 percent at constant currency levels, to $5.9 billion, amid growth across all business divisions.
In 2023, Apollo Global Management attempted to buy the company, ultimately submitting a £1.7bn bid after Wood Group rejected four previous proposals from the private equity giant.
Apollo eventually ended its pursuit of the company, meaning it was unable to make another acquisition proposal for six months.
Sidara’s decision to acquire Wood Group comes amid concerns that London-listed companies are easy takeover targets due to their perceived relative undervaluation.
Late last month, Royal Mail owner International Distribution Services accepted a £3.2bn bid from Daniel Kretinsky, a Czech billionaire who owns major stakes in Sainsbury’s, Foot Locker and West Ham United.
Kretinsky has made numerous commitments to try to get the deal approved, including maintaining the Royal Mail brand, the UK headquarters and the six-day-a-week first-class mail delivery service.
Packaging company DS Smith, cybersecurity specialist Darktrace and telecoms testing company Spirent Communications have also accepted takeover bids in recent months.