Dubai suitor slashes takeover offer for Wood Group amid further delay

Dubai-based Sidara is set to slash the value of a formal takeover offer for North Sea oilfield services group Wood Group by more than 14 per cent after a sharp share price slump.

Sidara, which has been pursuing a takeover of Wood Group since last year, made a conditional takeover proposal worth £242million – or 35p per share – in April.

But the deal has now seen several delays as Wood Group shares have suffered a more-than 70 per cent decline since the start of the year, amid cash flow problems, significant contract write-offs and accounting failures.

And Wood Group, which which employs some 35,000 people across 60 countries, told shareholders on Tuesday it is again seeking approval to provide Sidara to prepare a formal offer at a discount to its initial April bid.

Wood Group said Sidara is still committed to making a formal bid but, having now completed its due diligence, would do so at a value of 30p per share.

It marks a 14.2 per cent reduction from Sidara’s initial bid, but remains at a bumper premium to Wood Group’s closing share price of 18.44p on Monday. 

Major player: Wood Group employs some 35,000 people across 60 countries 

Sidara’s initial conditional offer included a potential $450million capital injection and Wood Group possibly pursuing an extension or amendment to its current debt facilities.

Wood Group did not comment on whether this commitment would be impacted by a reduction in Sidara’s offer price. 

‘The board has evaluated the reduced possible offer with its financial advisers and concluded that it is at a value that the board would be minded to recommend to Wood shareholders, should a firm intention to make an offer…be announced on such financial terms,’ Wood Group said.

Sidara will now have until 5pm on Thursday 28 August to ‘put up or shut up’, extended from a previous deadline of 25 August.

Wood Group added: ‘There continues to be no certainty that an offer will be made by Sidara even if the pre-conditions to the possible offer are satisfied or waived.’

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