MARKET REPORT: John Wood shares surge as it snubs takeover bids

Shares in John Wood Group hit an eight-month high after rejecting three takeover bids from a New York-based private equity firm.

The FTSE 250 oil rig and refinery engineer rocketed 29 per cent, or 44.85p, to 199.55p – its highest level since June last year – after it revealed that Apollo Global Management tabled had swooped on the firm.

But John Wood rejected the bids, including an offer of 230p per share made on January 26 which valued the company at £1.8billion.

The proposals were ‘carefully considered’ but rejected because ‘each significantly undervalued’ the group, the firm said in a statement. Analysts at Jefferies said the offer is ‘materially below our upside scenario of 290p’.

John Wood has faced pressure from activist investor Sparta Capital to boost its share price to avoid becoming a takeover target.

It has also called on John Wood, which employs more than 35,000 people across 60 countries, to return cash to shareholders.

Apollo, which has also targeted the education specialist Pearson (down 0.04 per cent, or 0.4p, to 908p), must decide whether to make another offer or walk away by March 22.

The FTSE 100 fell 0.3 per cent, or 22.91 points, to 7907.72, but the FTSE 250 rose 0.6 per cent, or 110.2 points, to 19790.49.

Recruitment firm Hays has started its search to replace boss Alistair Cox who has brought his 15-year tenure to an end.

The outgoing chief executive took over in 2007. He bowed out on a high after Hays reported record half-year fees in 19 countries. Fees rose 12 per cent to £651.9million in the six months to December.

Stock Watch –  Tribal Group

Tribal Group sank into the red after it warned little progress has been made on resolving its contract with a university in Singapore.

The software company said in December its eight-year contract worth £17million with Nanyang Technology University (NTU) would be loss-making following delays to implementation and delivery.

Tribal has now said it remains in ‘significant disagreement’ with NTU over how much revenue it is entitled to. Shares slid 7.9 per cent, or 4.15p, to 48.6p.

But profit fell 8 per cent to £97million during the period. Shares slid 3.6 per cent, or 4.5p, to 119.1p. 

Likewise, Genus boss Stephen Wilson is to retire at the end of September after four years in charge. He has been with the animal genetics company for ten years, with a search for his replacement under way.

Alongside Wilson’s departure, Genus reported a 25 per cent rise in revenues to £350.2million for the six months to December 31 and reiterated annual forecasts as it remained hopeful that the volatile Chinese porcine market will recover. Shares surged 8.7 per cent, or 234p, to 2938p.

Mondi, however, headed in the other direction. The packaging giant sank 4.8 per cent, or 71p, to 1406.5p after it warned its business would continue to face ‘softer demand and pricing’. 

Its bleak outlook came even though revenue surged 28 per cent to £7.85billion in 2022 while profit jumped 119 per cent to £1.37billion.

Serco slid 1 per cent, or 1.6p, to 150.2p despite the renewal of its contract with the US Department of Health and Human Services.

The deal will see the outsourcing group, which runs security, transport and immigration contracts, help those who qualify to buy health insurance. 

The four-year, seven-month contract, which will start on July 1, could be worth up to around £570million.

Hikma Pharmaceuticals took a hit after profits slumped 52 per cent to £235million in 2022 following a £151million impairment charge related to its generics business and research and development costs. Shares fell 2 per cent, or 35.5p, to 1718p.

Kitchen supplier Howden Joinery made a bright start to 2023 with its UK revenue up 6.1 per cent in the first eight weeks of the year.

It followed a 10.8 per centrise in revenues to £2.3billion in 2022 while profit was 4 per cent higher at £405.8million. Shares sank 1.8 per cent, or 13p, to 704.4p.

Construction group Morgan Sindall saw annual revenue rise 12 per cent to £3.6billion on the back of demand for office space. Shares soared 7.3 per cent, or 120p, to 1754p.

And precision instrument specialist Spectris posted a 14 per cent rise in sales in 2022 to £1.3billion. Profit surged 16 per cent to £401.5million. Shares gained 7 per cent, or 222p, to 3365p.