FTSE 250-listed engineering and consulting firm John Wood Group has given Dubai-based Sidara an extension to submit a formal takeover bid, Bloomberg News has reported. Wood Group said it has until April 17 to make a final move under takeover rules set by the UK’s market regulator.
This is Sidara’s second attempt to acquire Wood Group in the past 12 months. The UAE-based company made four bids last year, the latest of which valued the UK asset at £1.56 billion, but Sidara pulled out of the deal in August, citing adverse geopolitical and market conditions.
Wood Group shares rise
Now, however, interest is reportedly renewed amid a sharp fall in the value of Wood Group shares, which significantly reduced the company’s capitalization – from more than a billion to just over 200 million pounds. Against the background of news of the resumption of negotiations, Wood Group shares rose by 5% on Monday, demonstrating a positive reaction from investors and hopes for a potential deal. However, Sidara’s early exit from negotiations last summer provoked a deep drop in quotes, causing discontent among shareholders who have repeatedly faced unsuccessful takeover attempts.
Wood Group, which specializes in engineering and management services for the oil and mining sectors, now operates in more than 60 countries. In recent years, the company has been actively expanding its sustainability focus, helping clients with the processes of decarbonization and the transition to green energy. However, corporate governance and financial stability issues remain a stumbling block. In February this year, the company’s CFO Arvind Balan resigned after a scandal involving inaccurate information about his professional qualifications.
Deloitte audit
The situation is complicated by the wait for the results of an independent audit by Deloitte and the company’s final reporting for 2024. Sidara’s interest emerged after last year’s failed acquisition attempt by Apollo, which also submitted several offers worth up to £1.68 billion, but ultimately did not take a final step.
Market participants are currently closely monitoring the actions of Sidara, which, according to a statement from ADQ, a fund led by Sheikh Tahnoun bin Zayed Al Nahyan, has sufficient resources to implement strategic acquisitions. Whether the current interest will turn into a real deal will be known in April.