The firm, which provides oilfield and engineering services, said it had rejected the offer because it ‘undervalued Wood and its future prospects’
Engineering firm John Wood Group has snubbed a £1.42billion takeover bid from Dubai-based rival Sidara.
The company, which offers oilfield and engineering services, announced in a stock market update that it had dismissed the offer as it “undervalued Wood and its future prospects”. The proposal of 205p per share was a 35.5% premium on Wood’s closing price when it was made on April 30.
Earlier in the day, shares in John Wood Group increased by up to 26% following a Bloomberg report suggesting Sidara was considering a bid. By the afternoon, shares in the Scottish firm were trading 15% higher after the response.
Sidara has until 5pm on June 5 to put forward an offer, according to John Wood Group. “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 stated.
“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.” Last year, John Wood Group also turned down a buyout approach from private equity firm Apollo, valued at £1.68billion or 240p per share.
The company provides consultation, management and engineering services for the oil and mining sector, operating in over 60 countries. Yet, recently the firm has leaned more towards its sustainable branch, which aids firms with decarbonisation and energy transitioning.
It comes after hedge fund and activist shareholder Sparta Capital Management urged the engineering giant to consider selling itself in a letter last month. According to the letter, 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”.
