Shares in Wood Group surged over 13% on Monday following the disclosure of a £242m takeover offer from UAE-based Sidara.
The company's stock recovered considerable ground during early trading after experiencing a nearly 60% fall earlier in the year, amid growing concerns regarding Wood Group's governance and corporate culture, as reported by .
Sidara's new bid of 35p per share is markedly lower than the £1.5bn proposal it abandoned last year.
A Deloitte report in February highlighted "material weaknesses and failures" throughout Wood's operations, leading to a delay in the publication of its 2024 financial results after auditors were not provided with necessary information.
According to a London Stock Exchange announcement, Sidara has made substantial headway in its due diligence of Wood, addressing issues identified in the review.
The takeover proposition includes a potential capital investment of £341m into Wood.
The statement also mentioned ongoing work on various alternative refinancing solutions to secure a suitable and sustainable long-term capital structure for the company.
The merger of Wood and Sidara is envisioned to establish a "leading global engineering consulting company," leveraging Wood's expertise with Sidara's capabilities in the energy and materials sectors.
Last year, Sidara cited "rising geopolitical risks and financial market uncertainty" as reasons for withdrawing from the acquisition process for Wood, becoming the second suitor to exit after Apollo retracted its bid in 2023.
On Monday, Wood revealed that its board would be "minded to recommend" the most recent proposal from Sidara as it aims to secure an "appropriate long-term capital structure" which aligns with shareholder interest. Nonetheless, the commitment to a firm offer remains dependent on a range of pre-conditions, such as the release of audited full-year financial statements.
Established in 1956, Sidara serves as an engineering consultancy across 69 nations. In comparison, Wood Group has operational bases in about 60 countries and boasts a global workforce of 35,000 individuals.
