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Wooden Group, the embattled oil providers and engineering firm whose valuation plunged to lower than £200mn this month, has entered takeover talks with the United Arab Emirates-based firm that approached it with a £1.6bn buyout proposal final yr.
Sidara, which walked away from an earlier takeover attempt final August, made a recent method following the collapse in Wooden’s share worth in current weeks, in response to two individuals near the discussions.
The talks over the way forward for Wooden — as soon as the large homegrown success story of the UK’s improvement of the North Sea — had been ongoing on Monday morning but it surely was attainable no deal could be concluded, the individuals stated.
Wooden’s shares rose nearly 37 per cent on Monday after the Monetary Occasions reported Sidara’s curiosity.
The rise pushed the group’s market capitalisation to simply over £240mn, nonetheless solely a fraction of the roughly £1.6bn Sidara had supplied lower than a yr in the past.
The shares had plunged greater than 60 per cent earlier this month amid questions over the Aberdeen-based operator’s governance and heavy debt load.
Sidara, a privately held community of engineering and design corporations run from the UAE, was eager to maneuver shortly to make sure it may retain senior and mid-ranking Wood employees who’ve been angered by the corporate’s plight and its resolution to chop bonuses, in response to the individuals with data of the talks. The individuals didn’t disclose the phrases of a possible deal.
Following the FT’s report Wooden confirmed it had obtained an method from Sidara over a attainable provide for your complete group, including that there was no certainty a proposal could be made.
Below UK takeover guidelines, Sidara has till March 24 to announce a agency intention to bid or stroll away.
Sidara didn’t instantly reply to a request for remark. An individual acquainted with the group’s considering stated it had a “strategic conviction” concerning Wooden’s enterprise however remained cautious of the dangers concerned.
The droop in Wooden’s share worth has raised questions on the way forward for the operator, which grew out of a household fishing enterprise below the management of Sir Ian Wooden, turning him into one in every of Scotland’s wealthiest males.
He left the group in 2012 after promoting down the vast majority of his household’s shares and is estimated to retain a fortune of greater than £1bn.
The corporate, valued at greater than £5bn across the time of its £2.2bn takeover of engineering rival Amec Foster-Wheeler in 2017, stated this month that an impartial overview had unearthed “materials” weaknesses within the monetary and governance tradition at its initiatives enterprise.
Chief government Ken Gilmartin stated on the time that he was “disenchanted” and would look to promote property to spice up money stream.
By October subsequent yr it faces the expiry of about $1.4bn in varied debt amenities, and the collapse in its share worth has made a big fairness increase extraordinarily difficult.
Final week Wooden’s chief monetary officer, Arvind Balan, stepped down after admitting to misstating his skilled {qualifications}.
His departure added to the disaster dealing with Wooden, which is without doubt one of the greatest employers in Aberdeen, a metropolis already reeling from declining North Sea output and the UK authorities’s block on future hydrocarbon developments.
Wooden has explored different choices together with a attainable break-up of the enterprise led by the sale of its consulting arm, in response to two individuals accustomed to the talks.
The individuals stated the consulting enterprise might be valued at greater than £1bn, sufficient to right-size the guardian firm’s debt load now that an fairness increase could be difficult.
However the board’s choice was to promote your complete firm, two individuals accustomed to the talks stated, placing Sidara in pole place.
Sidara was previously referred to as Dar Al-Handasah, which was based in 1956.
Personal fairness agency Apollo, which tried to purchase Wooden for £2.2bn in 2023, will not be anticipated to pursue a rival bid this time, in response to individuals near the corporate.
Wooden, which employs 35,000 globally, stays one in every of a handful of oil providers corporations able to dealing with the large-scale initiatives favoured by the most important oil multinationals.
Except BP and Shell — already well-established multinationals earlier than the UK’s improvement of the North Sea — Wooden was one of many few home teams within the sector that went on to develop a world footprint.
Further reporting by Alexandra Heal in London
