Wood Group signals willingness to accept £242m takeover bid from Sidara

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WOOD GROUP has said it is open to a £242m (US$318m) takeover bid from UAE’s Sidara – nearly 85% lower than last year’s offer – as the engineering business grapples with mounting debt and the fallout from cultural failings.

Wood employs 35,000 people across more than 60 countries, providing engineering services for sectors including oil and gas, chemicals, renewables, minerals, and pharmaceuticals. Last year, Sidara offered 230p per share for the company, valuing it at around £1.5bn. It withdrew the offer in September, citing “rising geopolitical risks and financial market uncertainty”.

In November, Wood’s stock price tumbled from 124p to 49p a share. It announced disappointing results for its projects business and agreed to conduct an independent review of the group after its decision to exit lump sum turnkey and large-scale EPC in 2022 cost the business US$140m. Its value fell sharply again in February following another statement about poor results.

Then last month, it said the independent review had uncovered inappropriate management pressure and cultural failings that appear to have led to Wood giving misleading information to its auditors. Wood said it would miss the regulator’s deadline to publish its accounts so would suspend trading from 30 April. Its shares are now trading at less than 30p.

The firm is also looking to refinance significant debt ahead of repayment deadlines next year.

Sidara has now returned with a proposal to buy Wood for 35p per share and inject US$450m into the business. Wood has said that if Sidara makes a formal bid it is minded to recommend it to shareholders.

It said that combining with Sidara’s specialist strengths in energy and materials would create a leading global engineering consulting company. Sidara employs 21,500 people in 69 countries.

Under the terms of the proposal, Wood would continue to operate as a standalone brand to ensure continuity with existing clients. These include recent contracts from Shell UK, Esso Australia, and OMV.

Sidara has said it recognises the value of Wood’s talent and if an offer is accepted it will “support Wood in taking actions to retain and support employees” and is committed to uphold Wood’s pension obligations.

UK takeover rules now require Sidara to make a formal offer by 17 April or walk away.