Wood Sidara takeover bid: How did we get here?

Wood has pushed back the deadline for Sidara to make a final bid for its takeover of the company for a fourth time.

The saga has lasted well over a year, with multiple twists and turns. It’s uncertain if the end is near or if the “put up or shut up” (PUSU) deadline will be extended again.

While Energy Voice can’t answer the question of how it will end, we can look at how it started.

Prelude: Apollo and Wood

The Wood Sidara takeover bid began in 2024, but it was not the first time a firm tried to buy the Aberdonian services group.

In 2023, Wood was approached by US-based private-equity firm Apollo Global Management. It made three preliminary bids for the group, all of which Wood rejected.

Apollo initially offered 200p per share, pushing it up in a series of offers before reaching 240p – 59% more than Wood’s share price at the time of 151p and valuing the company at £1.66 billion – when Apollo issued its fifth and final proposal in April.

However, when the final PUSU deadline to make a firm offer rolled around in May, the equity group decided to walk away from the deal.

Analysts pointed to capital discipline from Apollo along with Wood’s exposure to the energy transition as driving its decision not to proceed.

Act 1: Sidara Takeover Bid

It was almost exactly a year later that Wood found itself subject to another takeover bid.

This time, it was from Dubai-headquartered engineering firm Sidara, also known as Dar Al-Handasah Consultants Shair and Partners.

Like Apollo, it started with an unsolicited proposal, this time at 205p per share. This valued the company at $1.65bn – a premium on the company’s 160p share price at the time.

Wood’s board rejected the proposal, saying that it undervalued the company and its future prospects.

© Supplied by Sidara

Sidara’s second bid pushed the offer up to 212p per share, and rose to 220p in a third bid.

However, a 230p per share offer, valuing the company at £1.59bn, caught Wood’s attention in May. The game of deadline extensions was started anew as the board needed time to mull it over.

The PUSU deadline for this was pushed back at the start of July, then again at the end of the month.

Finally, at the start of August, Sidara decided to walk away from its takeover attempt, blaming “rising geopolitical risks and financial market uncertainty”.

Its decision knocked 35% off of Wood’s share price as the firm saw share prices drop to 128p, valuing the business at more than £477m.

Act 2: Wood’s Woes

August brought little respite for Wood, as the end of the month saw it report almost $1 billion (£757m) in first-half losses.

Despite this, the company’s leadership was upbeat. Chief executive Ken Gilmartin pointed to its order book as a sign that the company’s transformation strategy was paying off.

However, by November, its share price dropped again after several large-scale contracts were written off following a review.

© Supplied by Wood plc

With shares closing down 60% at 49.84p, the firm shed over half a billion in value.

In addition, Wood was hit by a scandal when it was discovered that chief financial officer, Arvind Balan, had made mistakes on his professional qualifications, leading him to stepping down.

It’s no wonder the company’s chief executive said at the start of February that he was “disappointed in our financial performance”.

Act 3: Sidara’s New Bid for Wood

© Supplied by DC Thomson Dale Murr

It was against this backdrop that Sidara returned in February with a fresh takeover bid for Wood.

By then, Wood’s share price had gone from around 200p per share to just 34.7p.

A PUSU date was set for 24 March for Sidara to announce its firm intention to make an offer for Wood.

It didn’t take long for the story of Apollo’s and Sidara’s previous bid to start repeating itself, with this deadline extended multiple times.

In that time, another report warned of “material weaknesses and failures” in the financial culture of Wood, taking a further 30% off its share price.

By April, Wood’s board said it had received a non-binding takeover bid from Sidara, one that it “would be minded to recommend” to its shareholders and creditors.

The deal would see Sidara pay 35p per share of the company, or around £240m, a far cry from its previous offer.

It still represents a 10p premium on the company’s then 25p share price, and more than its current price of around 18p.

The takeover bid also means that Wood missed the deadline to publish its 2024 financial results. This resulted in its temporary suspension from the London Stock Market.

As of the last count, the current round of the Wood Sidara takeover bid has received four deadline extensions.

With the current PUSU date set for the end of June, it remains to be seen if a final decision will be made or if the deadline will be extended for a fifth time.