LONDON (ShareCast) - (Sharecast News) - Wood Group tumbled on Wednesday after saying it had rejected a second, improved £1.5bn takeover proposal from Dubai-based engineering and consulting company Sidara.
The second proposal of 212p a share in cash was up from an initial offer of 205p a share and was received on 14 May.

"The board carefully considered the latest proposal, together with its financial advisers, and concluded that it continued to fundamentally undervalue Wood and its future prospects," the company said. "Accordingly, the board unanimously rejected the latest proposal on 15 May 2024."

The engineering firm said there can be no certainty either that an offer will be made or as to the terms on which any offer might be made.

Under takeover rules, Sidara has until 1700 BST on 5 June to either announce a firm intention to make an offer for Wood Group or walk away.

Last May, Apollo Global pulled plans to make a takeover offer for Wood Group. The US private equity firm made five cash bids for the company, the last in April at 240p a share. Wood Group said on 17 April that it would engage with Apollo and give it access to due diligence, having rejected the four earlier proposals. However, Apollo chose to walk away.

At 1540 BST, the shares were down 6.1% at 188.37p.

Danni Hewson, head of financial analysis at AJ Bell, said: "For engineering veteran John Wood, all that class is a proving too tempting a morsel to pass up by Dubai-based Sidara, but it will have to dig deeper if it's going to win over a board that understands the fundamental value of the business and realises what's on the table is still insultingly low.

"John Wood is an old school engineering business that's pivoting to be at the forefront of the transition to renewables. It's taken its sweet time to get there and that glacial movement stirred up activist investors, but sometimes it's better not to grab the bird in hand and realise that what's in the bush is worth exploring further."

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