Aberdeen-headquartered energy services giant Wood has knocked back a fourth takeover offer from US firm Apollo Global Management.
The private equity group has already made three “unsolicited” offers for Wood which, on January 26, offered 230p per share, roughly valuing the firm at £1.5 billion.
Wood has announced that a fourth offer, at 237p per share, was made yesterday (March 6), which it said “continues to undervalue” the firm.
Nevertheless, it said it plans to “engage further, on a limited basis” with the New York-based global asset manager, suggesting the Aberdeen-based firm could yet find the right price.
Despite the 17p premium, Wood said: “The board believes this latest proposal continues to undervalue the group and is therefore minded to reject.
“The board will continue to engage with its shareholders and intends to engage further, on a limited basis, with Apollo.”
Shares surged
On the back of the original offer, announced on Feb 23, Wood shares surged by almost 32% to 204p.
At the close of market on 7 March when it revealed the fourth approach and rebuff, Wood share’s closed even higher – up 12% to 217.9p.
Under competition rules, Apollo has until March 22 to make a firm offer or drop its pursuit of Wood.
Founded in 1990, Apollo purports to be “one of the largest asset managers serving many of the world’s most prominent investors”.
Forecasted drop in earnings
Wood recently revealed a forecasted drop in earnings and revenues for its 2022 results, down from the previous two years.
A trading update has projected adjusted EBITDA of £311 million ($375 million) – £320 million ($385 million) for the financial year, down at least 30% from £460 million ($554 million) in 2021, and £523 million ($630 million) in 2020.
It’s after the group completed the £1.5 billion ($1.9 billion) sale of its built environment segment last year, which had earnings of around £124 million ($150 million) for 2021 and has not been included in the 22 figures.
Wood changed its chief executive last year, with Ken Gilmartin, who took over from Robin Watson in July, pledging to make cash generation his “top priority”.
