Target: Oil industry engineer Wood Group rejected a takeover bid from Dubai-based rival Sidara
Oil industry engineer Wood Group rejected a takeover bid from foreign predators after becoming the latest London-listed company to come under attack.
It rejected a £1.4bn offer from Dubai rival Sidara because it “fundamentally undervalued” the company, Wood said. The rejection came as it emerged that Bristol chipmaker Graphcore is a target of Japanese investment giant SoftBank.
Both are just the latest companies to fall into the crosshairs of foreign buyers, fueling concerns that British companies are undervalued and face a flood of merger and acquisition activity.
Global fund network Calastone warned that market sentiment remained negative despite the FTSE 100 hitting record highs.
British investors piled up funds last month as they sought to take advantage of tax incentives on Individual Savings Accounts (ISAs).
UK savers added £1.93bn to equity funds and £422m to bond funds in April, according to Calastone.
But the bulk went to global, North American and European funds, with £665 million withdrawn from UK investments. That took the total withdrawn from UK funds to £21.3 billion in 35 consecutive months of sales.
“The relentless negativity about UK-focused equity funds has not abated,” Calastone wrote.
That has left London-listed companies undervalued and vulnerable to buyers looking for a bargain.
Share in Wood, which is based in Aberdeen and specializes in engineering and maintenance in the energy sector, soared 16.9 per cent, or 27.9p, to 192.9p after interest from Sidara became public.
Last month, Wood’s investor Sparta Capital urged bosses to consider its UK listing and consider a sale amid the company’s falling share price.
Before yesterday, the stock was down more than a third over the past year. Meanwhile, Japanese conglomerate SoftBank is said to be in talks to acquire Graphcore.
Founded in 2016, Graphcore designs processing units for artificial intelligence software.
It was once valued at £2.2bn and touted as a potential rival to US giant Nvidia. But it recorded a 46 per cent drop in revenue to £2.2m last year.
The UK has seen a steady stream of companies bought so far this year.
Cyber security group Darktrace backed a £4.25bn takeover by US private equity firm Thoma Bravo last month, Australian mining giant BHP is in talks to buy Anglo American and Czech billionaire Daniel Kretinsky is eyeing the owner of Royal Mail, International Distributions Services.
Others also agreed to be bought out, including packer DS Smith, haulier Wincanton and housebuilder Redrow.
