Engineering firm rejects rival’s £1.42bn offer

ENGINEERING firm John Wood Group said it has turned down a £1.42bn buyout offer by Dubai-based rival Sidara.

The FTSE 250 firm, which provides oilfield and engineering services, said in a stock market update that it had rejected the offer because it “undervalued Wood and its future prospects”.

The offer of 205p per share represented a 35.5% premium on Wood’s closing price when it was made on April 30.

Sidara has until 5pm on June 5 to submit an offer, John Wood Group said.

“The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects. Accordingly, the board rejected the proposal unanimously,” the company said.

“There can be no certainty that any offer will be made for the company, nor as to the terms of any such offer, should one be made.”

John Wood Group was also the subject of a buyout approach by private equity firm Apollo last year, worth £1.68bn, or 240p per share, which it also rejected.

Wood provides consultation, management and engineering services for the oil and mining sector, with operations in more than 60 countries. However, it has focused more heavily on its sustainable business of late, which helps companies with decarbonisation and the energy transition.

It comes after hedge fund and activist shareholder Sparta Capital Management urged the engineering giant to consider selling itself in a letter last month.

Wood Group’s future “could be best supported by different owners, and we urge you to undertake a strategic review and explore the best way to maximise shareholder value, including a sale of the company”, the letter said.