Wood grants Sidara additional time to announce intentions for a takeover bid.
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In a significant development in the corporate landscape, Wood has granted an extension to Sidara, following a renewed approach from the firm last month. This extension allows Dar Al-Handasah, commonly known as Sidara, until 5 PM on April 17 to announce any intentions regarding a potential offer for Wood.
This move comes amidst ongoing discussions about a possible takeover deal for the Aberdeen-based company.
Following the announcement, Wood’s shares experienced a slight uptick, rising by 1.7% to reach 39.1p on Monday morning.
This increase reflects investor optimism surrounding the potential takeover, especially considering that Sidara’s earlier attempt to acquire Wood fell through less than a year ago. That initial bid, valued at £1.6 billion, was abandoned by Sidara, leading to a significant drop in Wood’s share price at the time.
Details of the Takeover Approach
Wood confirmed that the recent approach from Sidara was made last month, which resulted in a remarkable surge of over 33% in Wood’s share price. Since then, Wood has disclosed that it received a “non-binding” conditional proposal from Sidara. A spokesperson for Wood stated, “Following this, Wood provided Sidara with access to due diligence information and entered into discussions with Sidara.” However, they cautioned that there is no certainty regarding whether an offer will be made or the terms it might entail.
Historical Context and Future Implications
Wood’s current market valuation stands at approximately £270 million, a stark contrast to its peak valuation of over £5 billion seven years ago. The decline in value can be attributed to several factors, including failed takeover attempts, job cuts, and a significant drop in profits. The company experienced a dramatic collapse in share prices last August when Sidara withdrew from its first potential acquisition, citing rising geopolitical risks and financial market uncertainties as reasons for its decision.
As the deadline approaches, the possibility of an extended timeline remains, contingent upon the agreement of Wood’s board and the consent of the regulatory panel overseeing such transactions. Shareholders of Wood have been advised that they are not required to take any action regarding the potential offer at this time. The unfolding situation highlights the volatility and complexities of corporate acquisitions in today’s economic climate.
