Apollo granted extra month to make offer for Wood Group

Private equity firm Apollo Global granted another month to make an offer for John Wood Group

  • Apollo now has until 19 April to announce a ‘firm intention’ to make an offer
  • Wood Group’s board has turned down four takeover bids from Apollo to date 
  • The bids for Wood comes amidst a spree of acquistions of London-listed firms 

Apollo Global Management has been given another four weeks to put forward a takeover proposal for the engineering services business John Wood Group.

The private equity giant had until Wednesday next week to declare a ‘firm intention’ to make an offer but has now been granted an extension to 19 April.

Wood’s board has turned down four unsolicited takeover bids from Apollo to date because it believes they significantly undervalue the company, which has a current market capitalisation of just under £1.5billion.

Deadline: Apollo Global Management has been given another four weeks to put forward a takeover proposal for the engineering services business John Wood Group.

Last month, the Scottish business revealed it had received three separate offers from Apollo, the highest being worth 230p per share, before announcing that it had been offered a 237p per share deal a fortnight later.

Wood Group shares were 3 per cent higher at 209p on Friday morning.

The approach for Wood comes amidst a spree of acquisitions of London-listed firms by overseas private equity houses taking advantage of a weaker pound and relatively low valuations.

British stalwarts to fall victim to foreign buyouts in recent years include outsourcer G4S, Ultra Electronics, and supermarket chain Morrisons, which Clayton, Dubilier & Rice bought for £7billion in October 2021.

On Wednesday, events planner Hyve Group agreed to a £481million takeover from US-based Providence Equity Partners after rejecting two previous offers.

Providence’s accepted bid of 108p per share is more than 80 per cent below Hyve’s share price in January 2020. 

Shares in the exhibitions organiser plummeted during the Covid-19 pandemic as lockdowns, and cross-border travel restrictions caused conferences to be either cancelled or postponed.

Hyve took a further blow when it pulled out of Russia, where it employed over 200 people, following the start of the Ukraine war 13 months ago.

Wood Group shares have also failed to recover to their pre-Covid levels, after it was hit by the massive lockdown slump in oil prices in 2020 and the delayed commissioning of new projects.

This is despite the firm returning to profit in the first half of last year amid surging petroleum prices and the $1.8billion sale of its built environment division to WSP Global, one of the world’s largest professional services businesses.

At the end of December, the company had a record book of $6billion, having won renewed contracts with oil supermajors BP and Shell, as well as a four-year contract with INEOS to build a petrochemicals complex in Belgium.

Headquartered in Aberdeen and with operations in about 60 countries, Wood Group has traditionally provided engineering and consulting services to the oil and gas sector but has increasingly broadened into the renewables sector. 

On Tuesday, it completed the disposal of its offshore labour supply operations in the Gulf of Mexico to Danos, an energy services contractor situated in Louisiana. 

Chief executive Ken Gilmartin said the ‘divestment signals the proactive steps we’re taking to selectively high grade the group’s portfolio and invest in the markets and solutions where we see the strongest profitable growth.’

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