John Wood Group LON:WG. has confirmed it is considering a revised takeover proposal from Sidara, the Middle East-based engineering and design consultancy, after the suitor lowered its potential offer price to 30 pence a share.
The latest development marks a shift from Sidara’s earlier indication in April that it could pay 35 pence in cash per Wood share, valuing the Aberdeen-based energy services group more highly. At that time, Wood’s board had said it was minded to recommend the proposal, subject to full agreement on terms and conditions.
Since then, both companies have worked through a series of pre-conditions. These included alignment with Wood’s lenders on a refinancing package, progress on the company’s delayed audited accounts for the year ended December 31 2024, and completion of Sidara’s due diligence.
On Saturday, Sidara informed Wood’s board in writing that, following its review of the business, any formal offer would be pitched at the lower price of 30 pence a share. The board, after consulting its financial advisers, said it regarded the revised valuation as one it would still be inclined to recommend, should a firm offer be tabled under the UK Takeover Code.
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Financing discussions and audit progress
One of the central conditions for Sidara’s approach has been agreement on refinancing arrangements for Wood’s existing debt. The company said it had now reached commercial alignment with its lenders, with substantial progress made on documenting terms that are consistent with those outlined in July.
The group is also working with its auditor to finalise its 2024 accounts. Publication of the audited results has been delayed, and their completion remains an important step before any transaction can proceed.
Under UK takeover rules, Sidara had been required to announce by this week whether it intended to make a firm bid. Wood has requested, and received, consent from the Takeover Panel to extend that deadline until 5pm on August 28. This timetable can be pushed back further with the agreement of both sides and the panel’s approval.
For now, sources close to Wood have emphasised there is no certainty that a formal offer will be made, even if outstanding pre-conditions are satisfied or waived. Any transaction would remain subject to the full agreement of terms and regulatory clearance.
Strategic backdrop for the Wood Group deal
Wood, which provides engineering, consulting and project management services to the energy and industrial sectors, has faced financial pressures in recent years. Lower demand in traditional oil and gas markets, coupled with restructuring challenges, has weighed on its share price and profitability. A potential takeover by Sidara offers shareholders a cash exit, though at a reduced valuation compared with initial expectations.
The revised proposal highlights the difficult balance for the board: securing a deal that provides value for investors while recognising the company’s ongoing operational challenges. Sidara, for its part, gains an opportunity to expand further into energy transition and industrial services through Wood’s established platform.
What happens next?
With just days until the extended deadline, investors are awaiting clarity on whether Sidara will convert its reduced possible offer into a binding bid. For now, Wood has advised shareholders not to take any action.
The coming week will determine whether the months-long negotiations culminate in a formal takeover offer or lapse under the scrutiny of the UK’s takeover regime.
