John Wood Group’s board has urged shareholders to back a proposed takeover by Sidara Limited, warning that the company’s current financial structure is “unsustainable” and that the deal offers the best chance of future stability. The board’s call comes as Wood faces intense pressure from years of negative cash flow, mounting debts, and regulatory challenges.
Sidara, an entity controlled by Dar-Al Handasah Consultants Shair and Partners Holdings, has tabled a recommended cash acquisition for all issued and to-be-issued shares in Wood, to be implemented through a court-sanctioned scheme of arrangement. The proposed acquisition values Wood at around £216 million, or 30 pence per share- down from earlier offers following due diligence.
“Today is an important milestone in providing a stable foundation for Wood to deliver on its significant potential. The Board’s recommendation of Sidara’s offer follows an extensive review of the viability of all available options and it is the unanimous view of the Wood Board that this is the best option for all stakeholders, whilst delivering some value for our shareholders after what has been a very difficult few years for the company,” the board stated.
Wood has been under severe financial strain, having not generated sustainable free cash flow since 2017 and accumulating gross indebtedness of approximately $1.6 billion. Recent years have seen the company hit by regulatory fines, losses from major contracts, and restructuring costs. Regulatory investigations and the suspension of its shares on the London Stock Exchange have added to the urgency for a solution.
“The current capital structure of the Wood Group is unsustainable. When taking account of cash requirements in the business, Wood’s gross indebtedness is approximately $1.6 billion. Wood’s liquidity to fund its ongoing operations is currently limited,” the company stated in its regulatory filings.
Sidara’s proposal includes an immediate capital injection of $250 million upon shareholder approval, with a further $200 million available upon completion of the acquisition. The takeover is subject to several exceptional conditions, notably the publication of audited accounts and no substantial changes to major debt facilities. The scheme must be approved by at least 75% of voting shareholders at a scheduled court meeting, with the process expected to conclude in the first half of 2026.
“The acquisition by Sidara will solve our near-term liquidity challenges and strengthen the company in the longer term. In Sidara, we will have an owner that values our people, brand and the deep client relationships we have built over the years and together we will be in a stronger position to deliver for our clients and achieve our potential,” said Ken Gilmartin, CEO of Wood, in a statement.
The Wood board, advised by Europa Partners, Rothschild & Co, J.P. Morgan Cazenove and Morgan Stanley, believes the Sidara offer is “fair and reasonable” given current circumstances. The board has unanimously recommended shareholders vote in favour, with directors providing irrevocable undertakings for their own holdings.
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Shareholders are being urged to read the full scheme document and to submit proxy votes ahead of the court meeting and general meeting in November. The board emphasises that strong shareholder participation is vital: “It is important that, for the Court Meeting in particular, as many votes as possible are cast so that the Court may be satisfied that there is a fair representation of opinion of Scheme Shareholders,” the scheme document advises.
Should the scheme be sanctioned, Wood’s listing would be suspended, and its shares delisted after completion. The board concludes that any alternative refinancing would likely result in even less, or potentially no, value for shareholders. “The Wood Directors believe that any alternative refinancing option would likely generate materially less, and potentially zero, value for Wood Shareholders relative to the terms of this recommended Acquisition,” regulatory statements confirm.
