US private-equity firm Apollo has made a fresh, “compelling” takeover approach for Aberdeen’s Wood Group (LON: WG).
After “careful consideration”, and in a bid to reach “a definitive conclusion”, Apollo submitted a fifth, and final, offer on Tuesday.
In an update, the fund said the latest approach is based on a final price of 240 pence per share, up from the 237p previously tabled.
Decisively named the “final proposal”, the offer represents a 59% premium on the “closing undisturbed share price” of 151p, as of February 21, Apollo said.
It claims the move is also a 20% premium on the initial proposal, of 200p per share, lodged on January 11.
According to reports, the offer from the New York-based fund values Wood at around £1.66 billion.
In a statement, Wood said it “notes the announcement” made by Apollo, and its board will “will continue to engage with its shareholders”.
The company added: “There can be no certainty that an offer will be made. Further announcements will be made as appropriate.”
Back and forth
Scottish energy services giant Wood has knocked back numerous takeover bids from Apollo in recent weeks, with the company repeatedly stating that they undervalue the firm.
An offer was of 237p per share, valuing Wood at $1.98bn (£1.64bn), was made early last month, but was subsequently rejected.
According to Apollo, this latest bid “would provide a compelling opportunity for Wood’s shareholders to monetise their holdings in Wood for cash at a highly attractive valuation which is also at a significant premium to its recent and undisturbed share price, eliminating the inevitable execution risk and uncertainty associated with delivering Wood’s refreshed strategy”.
The fund added: “Apollo looks forward to engaging constructively with the Board of Wood to finalise the terms of a recommended transaction to be put forward to Wood’s shareholders.”
It is the first time Apollo has spoken publicly about the takeover bids, made “on behalf of certain investment funds managed by it”.
Rumours begun to circulate on Tuesday afternoon that the firm was preparing a sweetened offer for Wood, in an effort to break the deadlock that risked thwarting the deal.
Shares in London-listed Wood closed at around 204p on Monday – giving it a current market value of £1.4bn.
That is due in part to stakes in the company soaring in February after news about the approach from Apollo was made public.
Publishing its full year results last week, Wood revealed losses for 2022 of $694.5m, more than quadruple the 2021 losses of $172m.
Analysts have forecasted that management “must be coming under pressure to sell” given the poor performance of shares of late, with the company conceding it has “not delivered for our shareholders in recent years”.
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