Struggling UK oilfield services and engineering firm Wood Group has received a fresh takeover proposal from Dubai-based Sidara. The proposal values the company at £242 million, with the potential for an additional $450 million capital injection. The offer comes months after Sidara abandoned a £1.5 billion bid last year.
Shares in the FTSE 250-listed group surged by as much as 28% and are currently trading nearly 11% higher at 27.7p.
The Aberdeen-headquartered company, currently grappling with an accounting scandal, described the new offer as a “non-binding conditional” proposal. The bid, priced at 35p per share in cash, also includes a possible $450 million equity injection to support the business.
Wood said that if Sidara proceeds with a formal offer, its board would be “minded to recommend” the proposal to shareholders. The company confirmed that Sidara has made “significant progress” in its due diligence process.
Sidara, formerly known as Dar al-Handasah and founded in Beirut in 1956, provides engineering and consultancy services for major infrastructure projects. Following renewed discussions in February, the firm has until 17 April to either make a formal offer or walk away. It had previously backed out of acquisition talks in August, citing geopolitical tensions and market uncertainty.
Wood Group has already turned down several offers from Sidara, including a 230p per share bid in March.
The latest bid comes as Wood continues to deal with internal issues. Last month, it revealed that it would need to restate its financial results after a Deloitte review uncovered “cultural failings,” including withheld information from auditors and “inappropriate management pressure” to maintain existing reports.
Adding to its woes, Wood’s chief financial officer, Arvind Balan, resigned suddenly after it was revealed that he had misrepresented his professional qualifications. The company employs around 35,000 people globally.
