Recommended cash acquisition of Wood by Sidara

Recommended cash acquisition of Wood by Sidara

Dubai-based Sidara has significantly reduced its takeover proposal for Wood Group, cutting the offer by approximately 14% to 30 pence per share. The oilfield services provider announced the revised bid on Tuesday, following Britain's Financial Conduct Authority (FCA) probe into its operations [1]. Wood Group, in turn, has indicated that it will recommend the reduced offer to its shareholders if a firm offer is tabled.

The reduced bid values Wood Group at £207.6 million ($280.45 million) per Reuters calculations. Sidara previously offered 35 pence per share for the British company. The FCA investigation, which was launched after Wood Group delayed the publication of its annual results due to a pending audit, has added uncertainty to the takeover process [1].

Sidara's revised offer includes a £1.1 billion debt assumption and a £450 million capital injection, aiming to stabilize Wood Group's finances. However, these terms raise questions about the long-term sustainability of Wood Group's business model and its alignment with Environmental, Social, and Governance (ESG) criteria [2].

The extended "Put Up or Shut Up" (PUSU) deadline to 28 August 2025 provides investors with additional time to evaluate the deal. While the reduced offer price reflects a 14% drop from the initial proposal, it remains a floor value for a company whose share price has plummeted to 18 pence amid accounting scandals and operational challenges [2].

The Sidara-Wood Group takeover saga underscores the importance of patience and risk assessment for energy sector investors. The extended PUSU deadline allows investors to observe how Sidara navigates regulatory hurdles and aligns its vision with Wood Group's operational realities. If the deal proceeds, it could set a precedent for valuing distressed energy assets in a post-carbon transition world. Conversely, a withdrawal by Sidara would reinforce the sector's fragility and accelerate the shift toward renewable-focused firms [2].

References:
[1] https://www.globalbankingandfinance.com/JOHN-WOOD-M-A-SIDARA-5cd0ff01-2467-47b5-bd21-ecc12e30d088
[2] https://www.ainvest.com/news/strategic-implications-sidara-offer-extension-energy-sector-investors-2508/