Wood Group Extends Takeover Talks with Sidara

Deadline Extension for Independent Review

Wood Group, the British oilfield services and engineering firm, has agreed to extend its deadline for takeover discussions with Dubai-based Sidara. The extension allows time for Deloitte to complete an independent review of Wood’s projects division, which is considered a crucial step for the potential deal.

Sidara’s Return to Negotiations

Sidara had previously withdrawn from a £1.6 billion acquisition of Wood due to geopolitical risks and financial market uncertainties. However, last month, the company re-entered negotiations. Under UK regulations, Sidara faced a Monday afternoon deadline to make a firm offer or walk away. With both parties agreeing to an extension, discussions will continue.

Financial Challenges and Governance Issues

Wood Group has been struggling financially, with a forecasted negative cash flow for another year. The company also saw its Chief Financial Officer step down recently. Additionally, Wood Group is engaged in refinancing discussions for $1.4 billion of debt due by October 2026. Any potential takeover bid is expected to involve recapitalization efforts.

Market Capitalization Decline

Wood Group’s market capitalization has fallen to around £300 million, a significant drop from its peak valuation of over £5 billion in 2018. The decline is attributed to continued cash burn and governance issues highlighted in a February trading update.