ENGINEERING firm John Wood Group said it has turned down a £1.42 billion buyout offer by Dubai-based rival Sidara on Wednesday.
The FTSE 250 firm, which provides oilfield and engineering services, said in a stock market update that it had rejected the offer because it “undervalued Wood and its future prospects”.
The offer of 205p per share represented a 35.5% premium on Wood’s closing price when it was made on April 30.
Earlier in the morning, a report that Sidara was weighing a bid, first reported by Bloomberg, sent John Wood Group shares soaring by as much as 26%.
READ MORE: New North Sea oil and gas licences issued by UK Government
Shares in the Scottish company, which has its headquarters in Aberdeen, were trading 15% up in the afternoon after the response.
Sidara has until 5pm on June 5 to submit an offer, John Wood Group said.
They said: “The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects. Accordingly, the board rejected the proposal unanimously,” the company said.
“There can be no certainty that any offer will be made for the company, nor as to the terms of any such offer, should one be made.”
John Wood Group was also the subject of a buyout approach by private equity firm Apollo last year, worth £1.68bn, or 240p per share, which it also rejected.
Wood provides consultation, management, and engineering services for the oil and mining sector, with operations in more than 60 countries.
However, it has focused more heavily on its sustainable business of late, which helps companies with decarbonisation and the energy transition.
It comes after hedge fund and activist shareholder Sparta Capital Management urged the engineering giant to consider selling itself in a letter last month.
Wood Group’s future “could be best supported by different owners, and we urge you to undertake a strategic review and explore the best way to maximise shareholder value, including a sale of the company”, the letter said.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel