A shareholder in Wood Group (LON: WG) has called for the firm to explore a sale or list in the US over its “poor” share price.
Sparta Capital Management made the call over frustration about its valuation, despite “many operational achievements” from the Aberdeen-headquartered engineering firm.
A letter to chair Roy Franklin expressed frustration of UK public markets being “unwilling or unable to engage” in the firm’s story, adding that Wood “should undertake a strategic review and actively seek alternative solutions”.
It comes a year after private equity giant Apollo backed out of a takeover of Wood following a series of bids.
Wood, which is a FTSE-250 company, has a share price now well below the 240 pence per share cash bid tabled by Apollo in April 2023 – now “languishing” at around 140p.
In a letter from Sparta Capital Management to Wood chairman Roy Franklin, the investment manager urges Wood to explore a sale or list in the US due to the shares slumping by more than a third over the last 12 months.
Sparta praised Wood’s “many operational achievements” over its corporate strategy announced nearly 18 months ago, but said other methods might be needed to boost the share price.
The investment manager, understood to own around 2% of Wood, said the US is a “logical potential listing venue”, where rivals Jacobs and KBR are publicly traded.
It adds: “We have spoken to many of your existing investors, and there is widespread agreement that something must be done to address the poor share price performance.
“As such, we urge you to conduct a strategic review with an open mind as to the best way to achieve fair value for shareholders. If you conclude that shareholder value will be maximised through a sale of the company, we encourage you to engage with any suitable bidders who may emerge during this process.
“If you conclude that shareholder value will be maximised through a sale of the company, we encourage you to engage with any suitable bidders who may emerge during this process”.
Wood declined to comment.
It comes amid wider frustration over UK listings, with the past and present CEOs of Shell saying the location has seen shares “undervalued” compared to US peers.
Shell is said to be considering a moved listing to the US, sparking concern there could be a wider exodus out of the City of London by peers.
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