Wood Group shares rallied again on Tuesday after the energy engineering and services group confirmed it had received an approach from UAE-based competitor Sidara.
A Financial Times report sparked a dramatic rally in Wood Group shares yesterday, which was met with an official statement from both Wood Group and Sidara.
Prior to the FT report on Monday, the UK Investor Magazine had published an article exploring Wood Group’s recent share price decline. The article suggested that those parties previously showing interest in the acquisition of Wood would be licking their lips at the recent demise of Wood Group’s share price.
It didn’t take long for Sidara to throw their hat back in the ring with a proposed cash offer for Wood Group after previously offering 230p per share for Wood Group last year. They are now looking at a share price of under 40p.
Private equity has also shown an interest in Wood Group, and the recent decline in shares will not have gone unnoticed.
It won’t be surprising if Wood Group receives takeover approaches from multiple parties keen to acquire the beleaguered group at bargain basement prices.
Wood Group has high debt levels that will be difficult for them to manage as a standalone entity but will be light work for a larger group or private equity.
The Wood Group share price was trading up 2% at 38p at the time of writing. A formal offer hasn’t been made yet, but it is reasonable to think that when it is, it will be at a higher price than Wood trades today.
Wood Group has previously resisted takeover approaches, but recent developments may make it a little more open to proposals.