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Wood Group says no to acquisition in City fight

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Wood Group says no to acquisition in City fight
  • It comes after Hargreaves Lansdown and Anglo American rejected the approaches.
  • BT also mocked short sellers who bet against it.
  • Economist Simon French said there had been a “definitive change of tone”.

Wood Group yesterday became the latest London-listed company to reject a foreign takeover bid, in another sign the City is fighting back.

This comes after Hargreaves Lansdown and Anglo American also rejected multibillion-pound approaches this week, while BT mocked short sellers betting against it.

Simon French, chief economist at Panmure Gordon, said there had been a “definite change in tone”.

Fund flows from the UK have also started to increase. Around £120m was pumped into active UK funds last month, according to Liberum, whose analyst Joachim Klement said this showed “tentative signs” of recovery, after a prolonged exodus of investors.

That will be a much-needed shot in the arm for UK plc. Figures from investment firm Dealogic suggest £73bn of deals have been completed or pending this year and £8.5bn of advances withdrawn or cancelled.

This brings the total value of deals made by UK companies this year to more than £80bn.

Recipients include packaging group DS Smith, telecoms testing company Spirent Communications and transport company Wincanton.

FTSE 250 cybersecurity group Darktrace recently backed a £4.3bn acquisition by US private equity firm Thoma Bravo.

But companies are increasingly fighting predators. Wood Group, which provides engineering services to the energy and materials industry, rejected a third takeover proposal from Dubai’s Sidara.

The Aberdeen-based group said it was still “significantly undervalued” by the £1.5bn offer.

This came hot on the heels of Anglo American rejecting a “final” offer from rival BHP on Wednesday, which valued the FTSE 100 company at £39bn. Direct Line and Currys have also fought foreign takeovers.

It seems to reflect a change of sentiment on the Square Mile. French noted a “definite change in tone at the board level, from accepting offers to increasing confidence to waiting longer and staring down short sellers.”

Allison Kirkby, chief executive of BT, last week berated investors who made a record £300m bet against the FTSE 100 company. Several major institutions and hedge funds have taken “short” positions in the stock, hoping the stock price falls.

But the telecoms chief said her plans mean “some of those shorts will start to taper off.” Kirkby said BT would aim to save another £3bn by the end of 2029.

However, the UK is not out of the woods. Jefferies analysts shortlisted more than 70 potential acquisition targets in Europe, including London-listed companies such as Entain and Pensionbee.

Lansdown: stocks have woken up

Hargreaves Lansdown co-founder Stephen Lansdown said yesterday that the takeover bid has “sparked” interest in its shares.

Lansdown, who started the investment platform in 1981 with Peter Hargreaves, was commenting after the board rejected a £4.67 billion approach from a consortium including private equity group CVC and Abu Dhabi investors.

The shares ended the week up 21 per cent despite falling 2.7 per cent, or 30p, to 1,090p yesterday.

Lansdown, 71, is the second-largest individual shareholder, with a 6 percent stake. “He has woken up the stocks,” he told Bloomberg. ‘It’s interesting to see that third parties see the value and are looking to take advantage of it. “It’s good that the value of the company is recognized.”

The comments come just a day after Hargreaves, the largest shareholder, with a stake close to 20 per cent valued at just over £1 billion, said he was “looking at all options”.

Redcentric the last objective

Shares in IT services provider Redcentric rose 13 percent, becoming the latest London-listed company to be targeted by a foreign bidder.

It said it was in the “early stages of talks” with Italian rival Wiit about a bid and there was “no certainty” of an offer.

Under acquisition rules, Wiit, which specializes in providing cloud services and cybersecurity, must announce whether it wants to make a formal offer or withdraw by June 21.

The shares soared 12.8 per cent, or 17.2 pence, to 152 pence, taking gains for the year to almost 20 per cent. The stock has hit its highest level since September 2020, but remains nearly a quarter off its 2016 high.

It is valued at just over £200m.

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