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British Oil Services Firm John Wood Rejects £1.4bn Takeover Offer From Dubai-based Rival

John Wood Group rejected a £1.4bn bid from Sidara, citing undervaluation at 205p per share. This follows a failed bid from Apollo Global Management. Anglo-American and BP face similar takeover interests. Wood's share price briefly surged before stabilizing at 188 p. Activist investor Sparta Capital Management urges a strategic review, including a potential sale, to boost the lagging UK share price.

Times Now Digital

Updated May 9, 2024, 20:07 IST

John Wood Group has turned down a £1.4bn acquisition bid from a Dubai-based competitor, Sidara!!

A British oil services firm John Wood Group has turned down a £1.4bn acquisition bid from a Dubai-based competitor, Sidara, citing that the offer did not adequately reflect the true value of the company. Aberdeen-based Wood is the latest British company on the London Stock Exchange to face takeover speculation amid deepening concerns that UK-listed stocks are undervalued compared with other markets.

The Wood Board released a statement saying that their FTSE 250 company had received an unsolicited proposal from Sidara to acquire it at 205p per share, but the board unanimously rejected the offer. It mentioned, “The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects."

The approach came approximately a year following the withdrawal of a 240p-per-share bid from US-based private equity firm Apollo Global Management for Wood, which occurred after multiple unsuccessful attempts and offers with no reasons disclosed.

Wood is not the only London-listed company facing takeover interest. There is a significant bidding competition emerging for the FTSE 100 miner Anglo-American, following its rejection of an undervalued offer from BHP. Additionally, Swiss mining firm Glencore is reportedly preparing a bid, and there are suggestions that British-Australian miner Rio Tinto might also consider making an offer.

Last year, BP had to reassure investors that it was not a takeover target, as its stock performance consistently trailed that of its competitors in the United States.

Wood's share price, previously at approximately 600p per share before the pandemic, saw a surge from 164p to 204p per share in early Wednesday trading following the company's statement. The price then stabilized around 188p per share by lunchtime.

Wood is now facing pressure to boost its struggling market valuation following demands from activist investor Sparta Capital Management. Sparta Capital Management called on the Wood Board to conduct a strategic review of the business and explore alternative options to address the company's lagging UK share price, including potential sale considerations.

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