Wood Group considers £242m Sidara bid amid financial turbulence and delayed audit

John Wood Group plc has confirmed that it is evaluating a £242 million non-binding conditional proposal from Dubai-based Sidara. The proposal comprises a cash offer of 35 pence per share to acquire the entire issued and to-be-issued share capital of the company. In addition to the possible acquisition, Sidara has proposed a $450 million capital injection into Wood and recommended that the company seek certain amendments and extensions to its existing debt facilities. The offer, while subject to pre-conditions, is now under active consideration by Wood’s board and advisors.

The proposal arrives at a time of heightened financial pressure and uncertainty for Wood. Following an independent review led by Deloitte, the company disclosed internal control weaknesses, including instances where information had been inappropriately withheld from auditors. The fallout from this review has delayed the company’s ability to publish its FY24 audited accounts by the required deadline. If the results are not published by April 30, 2025, Wood’s shares could be suspended from trading on the London Stock Exchange, exacerbating liquidity and reputational challenges.

What does Sidara’s offer entail for Wood shareholders?

The proposed deal from Sidara is structured as a comprehensive solution that includes a cash offer for all shares, an immediate capital injection, and a roadmap for refinancing Wood’s existing debt. Sidara has indicated that it has made significant progress in completing due diligence, especially regarding the matters raised in the Deloitte report. If remaining pre-conditions are met—including successful debt modification negotiations and the publication of Wood’s full-year financials—Sidara intends to formally announce a firm offer under Rule 2.7 of the UK Takeover Code. Wood’s board has already indicated that, based on current terms, it would be minded to recommend such an offer to shareholders.

Delayed accounts and financial strain leave Wood vulnerable

Wood’s financial stress has been building over the past year. Most of the company’s debt facilities are due to mature in October 2026, prompting the board to initiate a full-scale review of refinancing options. In the short term, the company secured retrospective waivers to address covenant breaches, with the current waiver period set to expire at the end of April. However, ongoing delays in publishing audited results have complicated negotiations with creditors, and Wood is actively seeking further waivers and amendments to ensure business continuity.

The financial review conducted by Deloitte has become a focal point in the discussions around any potential deal. The revelations of withheld information and a culture of poor internal controls have cast doubt over the company’s governance framework. These findings not only affect investor confidence but also create hurdles for securing long-term capital on favourable terms. In this context, the Sidara offer—despite its discounted valuation—is being viewed as a potentially stabilising alternative for the company’s future.

Structure of the $450 million Sidara Liquidity Arrangement

Sidara’s $450 million proposed capital injection is to be disbursed through a structured liquidity arrangement, which would be provided as new committed debt instruments. The total amount is divided into two tranches. The initial tranche of $250 million would become available upon shareholder approval of the offer or 21 days after the posting of the offer document, depending on whether the transaction proceeds as a scheme of arrangement or a direct takeover. The second tranche of $200 million would be accessible only upon the full completion of the transaction.

If the board of Wood were to withdraw its recommendation of the offer—unless Sidara is presented with a competing bid it agrees to match or improve—the initial funds drawn under the arrangement would become immediately repayable. Should the deal collapse due to regulatory or antitrust hurdles, the initial tranche would remain in place through to its maturity, though the second tranche would not be drawn. The capital provided would initially rank pari passu with Wood’s existing revolving credit and term loan facilities. Following the deal’s completion, both tranches would become subordinated to existing debt instruments, with terms mirroring the company’s current term loan pricing.

Sidara’s proposed liquidity arrangement is conditional on agreement from Wood’s existing lenders and noteholders, and both companies are engaged in ongoing discussions with these stakeholders. The UK Takeover Panel has granted provisional consent for Wood to enter into such agreements in line with Rule 21.2 of the Takeover Code, provided final terms are agreed.

Strategic value: Creating a global engineering leader

The acquisition of Wood would significantly enhance Sidara’s position in the global engineering consulting market. Sidara, which rebranded in 2023, is a privately held multinational group with over 21,500 specialists working across 350 offices in 69 countries. The group owns well-known entities including Dar, Perkins & Will, and TYLin, and is fully owned by active partners of the business. A merger with Wood would extend Sidara’s energy and materials capabilities and diversify its geographic reach, particularly in high-growth regions such as the Middle East and the United States.

Sidara has emphasised that Wood would retain its client-facing identity and brand integrity. The firm has also signalled strong support for Wood’s employees, committing to upholding pension obligations and taking steps to preserve business continuity. From a strategic standpoint, the combination of Sidara’s scale and Wood’s domain expertise could offer competitive advantages in pursuing large-scale energy transition and infrastructure projects globally.

Board recommendation likely—conditional on terms and regulatory progress

While Sidara’s current offer represents a sharp discount compared to past bids—including a £1.6 billion proposal rejected in 2024—the Wood board believes the current structure is more aligned with the company’s immediate capital needs and long-term viability. Having explored other alternatives, such as major equity issuances or asset disposals, the board has signalled that Sidara’s offer is the preferred route forward, subject to final terms being agreed and regulatory conditions being met.

The offer remains conditional on key milestones: publication of FY24 audited accounts, satisfactory completion of due diligence, binding agreements on debt amendments, and formal endorsement by Wood’s board. If these hurdles are cleared, Wood shareholders will be asked to vote on the offer before it can be finalised. Until that time, the board has advised shareholders to take no action, and a further announcement is expected in due course.

Stock sentiment and market reaction

The market has responded positively to the announcement of Sidara’s potential bid. Wood Group’s shares (LON: WG) rose more than 6% to around 30 pence following the news, although this remains well below the offer price and significantly under its 2024 peak. Investor sentiment reflects cautious optimism that the proposal could provide a much-needed lifeline for the company.

Analysts remain divided on the long-term valuation prospects but note that the current proposal may be the best available option given the company’s financial constraints and operational challenges. Most brokerages currently assign a “Hold” rating on the stock, advising investors to await further clarity on the bid’s final terms before making portfolio decisions. Institutional activity has picked up slightly since the announcement, with increased speculative positioning among active fund managers. Retail investor interest has also surged, with a growing volume of queries about the takeover and the potential upside in case of a competitive bid.

Search visibility for Wood Group has seen a modest uplift following the announcement, with traffic driven by heightened interest in takeover speculation. Under Google’s post-Helpful Content updates, visibility has improved on news portals covering the situation comprehensively. Queries related to stock market performance today, business news updates today, and real-time stock exchange news featuring Wood have spiked in trending business search segments.

A turning point for Wood’s future?

The weeks ahead will be critical for Wood’s stakeholders as the company works to finalise its financial statements, negotiate debt extensions, and potentially bring the Sidara transaction to a binding agreement. With a firm offer deadline now extended to May 15, 2025, all eyes are on whether the deal can proceed to shareholder approval.

The Sidara bid, while significantly lower than prior offers, brings with it more than just cash—it offers strategic stability, access to growth capital, and a future within a larger, globally diversified engineering platform. For Wood, this may represent the most pragmatic path out of its current financial and governance crisis.