Sidara has offered £242 million to purchase Wood Group, marking a shift less than a year after withdrawing from a £1.5 billion bid for the struggling UK oil services and engineering firm.
On Monday, Wood announced that Sidara, a UAE-based company, had submitted a “nonbinding conditional proposal” to buy the firm at 35 pence per share, reflecting a 40% premium over last week’s closing price of 25 pence.
This offer also includes a potential $450 million investment by Sidara into Wood. The board at Wood indicated it would likely recommend that shareholders accept a definitive offer from Sidara, which operates a network of engineering and design companies out of the UAE and London.
Moreover, Sidara would assume Wood’s outstanding debt of about $1.1 billion, a significant portion of which needs to be refinanced by October.
The proposed price is roughly 85% lower than the offer Sidara discussed last year before withdrawing due to “geopolitical risks and financial market uncertainty.”
Wood’s shares have plummeted recently due to high debt levels and governance concerns. Last month, the company announced it would need to restate financial results for the past three years, leading to delays in its accounts for 2024, which may result in a trading suspension for its shares by the end of April.
An independent review revealed “cultural failings” within Wood’s projects division, including failures in information sharing with auditors.
On Monday, Wood noted that Sidara had made “significant progress” in its due diligence, but any final offer would hinge on Wood releasing its audited accounts for 2024.
The Financial Times first reported Sidara’s renewed interest in acquiring Wood back in February. Wood expressed that merging with Sidara would form a leading global engineering consulting firm while allowing Wood to continue operating as a separate brand.
Following this news, shares of Wood rose more than 14% during early trading on Monday.
According to UK takeover regulations, Sidara has until April 17 to either present a firm offer or withdraw from negotiations.