Dubai-based engineering and consulting firm Sidara has submitted a fourth and “final” takeover proposal to Aberdeen-based rival John Wood Group.
It announced on Wednesday that the new proposal valued FTSE 250-listed Wood at 230p per share, a 4.5 per cent uplift from its previous price of 220p. Sidara’s initial proposal, submitted late last month, valued the shares at 205p.
Despite confirming, in accordance with takeover rules, that the price “will not be increased”, Sidara said it reserved the right to raise its bid in the case of a counter-offer from another firm or if the UK’s Takeover Panel provides its consent.
The new proposal marks a roughly 52 per cent premium to Wood’s closing share price on 29 April, immediately before Sidara made its first bid and a 30.4 per cent premium to Wood’s highest share price in the previous year.
Under UK takeover rules, Sidara has until 5pm on 5 June to either make a firm offer for Wood or walk away.
Sidara said Wood had not engaged with it since it making its first approach, adding: “Sidara does not believe that its proposal can be progressed unless the board of Wood engages with Sidara and an extension to the deadline is granted.”
In a separate announcement on Wednesday, Wood confirmed its board was “evaluating” Sidara’s latest proposal with financial advisors.
When announcing its rejection of Sidara’s previous offer last Friday, Wood said the deal would “significantly undervalue the group and its prospects”.
This year has seen a string of foreign firms trying to pounce on the relatively weak valuations of many London-listed names compared to their overseas counterparts.
Before jumping on news of Sidara’s takeover efforts, Wood’s shares had fallen around 25 per cent over the last 12 months. The slump had prompted top-10 investor Sparta Capital Management to recommend Wood explore a US listing or sale.
Wood’s shares have not traded in line with the prices put forward by Sidara, signalling a lack of confidence from investors that any deal will go ahead. Wood’s shares dropped more than six per cent to 179p after Sidara’s announcement on Wednesday.
Last year, Wood mulled five successive takeover bids from Apollo, with the US private equity giant eventually walking away after a final £1.68bn, 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.