Wood Group has rejected a second takeover offer from its Dubai-based rival Sidara, only a week after turning down the company’s first bid.
Yesterday, Sidara hiked its initial offer of over £1.4bn, or 205p per share, by about three per cent to 212p per share.
In a stock exchange notice this afternoon, Wood said it had unanimously rejected the bid.
The board stated that it had concluded “it continued to fundamentally undervalue Wood and its future prospects“, the exact language used to turn it down after the failed attempt last week.
Following the decision to reject the first bid, Wood’s stock price shot up, rising 29 per cent during the week.
However, today’s second rejection was interpreted badly by the market, with the firm’s stock price crashing six per cent in a matter of minutes.
Prior to last week’s news, Wood’s shares had fallen rapidly over the last year, declining by around 25 per cent.
This led Sparta Capital Management, one of the largest shareholders in the firm, to recommend it explore a US listing or sale.
Last year, Wood mulled five successive takeover bids from Apollo, with the US private equity giant eventually walking away after a final £1.7bn, or 240p per share, offer last April.
Wood provides consultation, management and engineering services for the oil and mining sector, with operations in more than 60 countries. The company currently employs around 6,500 people in the UK, most of whom are based in Aberdeen.
The firm has focused more heavily on its sustainable business in recent times, which helps companies with decarbonisation and the energy transition.
Under the UK takeover code, Sidara still has until 5pm on 5 June to either announce a firm intention to make an offer for Wood or state that it does not intend to make an offer.