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Engineering and consulting company John Wood Group has rejected a third takeover offer from Dubai-based Dar Al-Handasah, known as Sidara, as continuing to “significantly undervalue” the company and its prospects.
Aberdeen-based Wood, founded by Scottish billionaire Ian Wood in 1982, said on Friday it had turned down the unsolicited cash offer from engineering and consulting group Sidara of 220p a share.
The approach was sweetened from its most recent offer of 212p, which was raised from an initial bid of 205p. Wood’s shares were trading at 182.7p on Friday morning, having risen 1.5 per cent.
Wood said it had carefully considered the latest proposal from Sidara but concluded that it continued “to significantly undervalue the group and its prospects”. Sidara has until June 5 to make a firm offer.
The approach comes a year after US private equity firm Apollo Global abandoned an attempt to buy Wood, after a months-long pursuit. Apollo walked away from its bid of 240p a share shortly after Wood decided to engage, having rebuffed several previous preliminary bids.
Wood is in the midst of a turnaround plan, and is facing activist pressure to consider a sale in order to boost its share price performance, or move its listing to New York. Activist investor Sparta Capital Management said last month: “If the UK public markets are unwilling or unable to engage in Wood’s story, we believe you should undertake a strategic review and actively seek alternative solutions.”
Wood insisted in a trading update earlier this month that its “simplification programme” was progressing well and that it was on track to generate annualised savings of about $60mn from 2025, with about $10mn coming this year.
At the time it reported a 6 per cent drop in first-quarter revenue year on year, in part reflecting a change in its strategy that focuses on businesses with higher margins. Earnings before interest, taxes, depreciation and amortisation increased 4 per cent, as improved margins offset lower revenue.
Wood said it would boost profitability and deliver “significant free cash flow” in 2025, having previously said at the presentation of its 2023 full-year results that it was “on track to deliver positive free cash flow” this year.
In its trading update this month, Wood also said it expected its net debt at the end of 2024 to be “similar” to levels from a year earlier. It had previously indicated that borrowing levels would be lower due to asset sales.
