John Wood Group rejects £1.42bn takeover bid from Dubai-based rival
Engineering firm John Wood Group has rebuffed a £1.42 billion takeover bid from Dubai-based rival Sidara. The FTSE 250 company, which offers oilfield and engineering services, announced in a stock market update that it had dismissed the offer as it "undervalued Wood and its future prospects".
The proposal of 205p per share was a 35.5% premium on Wood's closing price when it was made on April 30. Earlier in the day, shares in John Wood Group surged by up to 26% following a report by Bloomberg suggesting that Sidara was considering a bid.
By the afternoon, shares in the Scottish firm were trading 15% higher. John Wood Group stated that Sidara has until 5pm on June 5 to submit an offer.
READ MORE: Aberdeenshire's Fiona Harvey to appear on Piers Morgan show to discuss Baby Reindeer
READ MORE: BrewDog boss James Watt steps down after 17 years at helm of Scottish brewer
"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."
Last year, John Wood Group also turned down a buyout approach from private equity firm Apollo, worth £1.68 billion or 240p per share.
Wood provides consultation, management and engineering services for the oil and mining sector, operating in over 60 countries.
However, the firm has recently been concentrating more intensely on its sustainable business, which aids companies in decarbonisation and energy transition.
This action follows last month's letter from hedge fund and activist shareholder Sparta Capital Management, imploring the engineering behemoth to consider a sale.
In the letter, it was stated that 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".
