Apollo’s fourth takeover bid continues to ‘undervalue’ Wood Group

The Wood Group said it was prepared to reject a fourth cash offer from Apollo Global after the energy services company previously rejected three offers from the US private equity group.

The sweetened offer would value the FTSE 250-listed company at 237p per share, or about £2bn, up 3 per cent from its previous offer of 230p per share.

“The Board believes this latest proposal continues to undervalue the group and therefore intends to reject it [it]’ the Wood Group said in a statement on Tuesday.

The takeover attempts come as the Aberdeen-based company faces pressure from an activist shareholder to raise its share price.

Sparta Capital, founded in 2021 by former Elliott Management portfolio manager Franck Tuil, has called on Wood Group to buy back its shares in a bid to boost its valuation. The investment firm has warned that Wood Group’s “significant undervaluation” makes it vulnerable to a takeover.

Apollo’s previous bid on January 26 offered 230p per share, a premium of 55 per cent compared to Wood’s share price at the time and equates to about £1.9bn when net debt is factored in.

Shares in Wood Group were up more than 14 percent in Tuesday morning trading in London to trade at around 222 pence a share.

The “company’s board of directors will continue to work with its shareholders and intend to continue working with Apollo on a limited basis.”

A representative from Apollo declined to comment.

The Scottish company provides consultancy, asset management and engineering services to the energy and materials sectors and has recently expanded into clean energy projects such as wind farms. Its revenue increased about 8 percent last year to $5.4 billion.

Apollo is following Wood Group at a time when a majority of FTSE 250 chiefs believe UK-listed companies are vulnerable to foreign takeovers this year, as M&A activity is increasingly expected to slow as economic conditions improve will wear.

Another US fund, Providence Equity, has attempted a takeover of London-listed exhibition company Hyve, a move some top shareholders have described as “opportunistic”.

Under UK takeover rules, Apollo has until March 22 to announce its firm intention to bid for Wood or to withdraw.

https://www.ft.com/content/34864d5e-4c71-4c10-a5eb-a508a2325905 Apollo’s fourth takeover bid continues to ‘undervalue’ Wood Group

Brian Ashcraft

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