Wood Group minded to recommend latest takeover proposal from Sidara

(Sharecast News) - Wood Group said on Monday that Dubai's Sidara has made a non-binding conditional takeover proposal valuing the company at 35p per share that it would be minded to recommend. The proposal also includes a possible capital injection of $450m from Sidara and would require Wood to seek an extension of its existing committed debt facilities.

Wood Group said: "Work continues on a range of alternative refinancing options. However, having carefully considered the viability of these options together with its financial advisers, the board of Wood currently believes that the possible offer represents the better option for Wood's shareholders, creditors and other stakeholders.

"Accordingly, the board of Wood has indicated to Sidara that, should an offer be made on the terms set out above, it would be minded to recommend the offer to Wood's shareholders, subject to agreement of the full terms and conditions of the offer."

At the end of May 2024, Wood Group said that it was evaluating a fourth and final "unsolicited, preliminary and conditional" takeover proposal from Sidara at 230p a share.

However, in August last year Sidara announced that it would not be making a takeover offer for Wood Group due to "geopolitical risks and financial market uncertainty".

Talks between the two kicked off again in February 2025.

At 1045 BST, the shares were up 11.3% at 27.82p.

Russ Mould, investment director at AJ Bell, said: "Once a big success story in the UK energy industry, Wood Group looks set to succumb to a pretty sorry end, although shareholders may be only too willing to draw a line at this point given the company's recent struggles.

"The shares recently traded at all-time lows after it was forced to delay results as an independent probe found key financial information had been withheld from auditors.

"This was expected to result in material adjustments to previous financial statements and its balance sheet. The latest in a litany of disasters does not seem to have dissuaded erstwhile suitor, Dubai-based Sidara, which has put forward a 35p per share proposal.

"This feels very small beer compared with the 230p on the table before Sidara walked away from a deal last summer but beggars cannot be choosers and such is Wood Group's perilous position it has little choice but to accept what is on offer, particularly given Sidara is pitching a potential capital injection as part of the agreement. Wood Group rather forlornly says it is looking at alternative refinancing options but the fact it is minded to recommend a firm offer if it is forthcoming is telling.

"The whole saga is a reminder that so-called 'transformational' acquisitions more often destroy than create value as Wood Group's problems can largely be traced back to its combination with Amec Foster Wheeler in 2017."