Wood Group has moved a step nearer to leaving the London Stock Exchange after its board indicated it was minded to accept a reduced takeover offer from Dubai-based engineering group Sidara.
The FTSE 250 oil services company said on Tuesday that Sidara, which had originally offered 35p a share in April, had revised its bid to 30p a share following due diligence.
Wood’s board, after consulting its advisers, concluded the revised approach was at a value it would be minded to recommend to shareholders.
The deadline for Sidara to confirm its intention or withdraw has been extended once again, this time until 28 August.
Wood’s long-running takeover saga
Sidara’s pursuit of the Aberdeen-headquartered firm has been turbulent.
The Middle Eastern company, formally known as Dar Al-Handasah Consultants Shair and Partner Holdings, previously made a £1.58 billion approach valuing Wood at 230p per share last year, but walked away citing geopolitical and financial uncertainty.
Nearly two years ago, Wood also rejected several bids from US fund manager Apollo Global Management, which had offered up to 240p per share, or £1.7 billion.
The latest move reflects how sharply Wood’s valuation has fallen.
Shares were suspended in May when they traded at just 18p, far below highs of almost 880p seen less than a decade ago.
Takeover comes amid governance and regulatory troubles
The collapse in value has been exacerbated by a series of governance failures.
In March, Wood admitted it needed to restate past results after a review uncovered “cultural failings” that led to information being withheld from auditors.
Deloitte’s independent assessment found material weaknesses in the group’s financial culture, particularly within its projects division.
The UK’s Financial Conduct Authority launched a formal investigation in June into Wood’s accounting practices, prolonging investor uncertainty.
The company has yet to publish its delayed 2024 financial results, with auditors still reviewing its accounts.
These issues compounded April’s warning that prior years’ accounts would need restating, leading to the suspension of its shares on the London Stock Exchange.
Sidara’s interest despite challenges
Despite these headwinds, Sidara has maintained interest in acquiring Wood Group, which employs about 35,000 people and provides oilfield services and engineering consultancy globally.
Sidara’s willingness to reduce its offer price indicates the risks associated with Wood’s unresolved accounting matters but also underlines its long-term strategic value in energy services.
Chief executive Ken Gilmartin has been attempting to stabilise the company and restore credibility, but the prolonged uncertainty has left the group vulnerable to overseas suitors.
London market exodus continues
If completed, a takeover would mark another setback for London’s status as a global financial centre.
A string of high-profile companies has either shifted their primary listing to the United States or abandoned London altogether.
In recent months, payments firm Wise, construction rental group Ashtead, gambling operator Flutter Entertainment and building materials giant CRH have all chosen US listings.
Drugmaker Indivior has also confirmed it will cancel its secondary London listing, while metals investor Cobalt Holdings shelved plans to float in the UK capital.
Wood Group’s probable departure will deepen concerns about the attractiveness of London for large international companies.
With its shares suspended and value heavily eroded, the deal could also highlight how governance failings have left one of Scotland’s best-known engineering firms open to foreign takeover.
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