Wood Group said it was “minded to reject” a fourth cash offer from Apollo Global after the energy services business previously spurned three bids from the US private equity group.
The sweetened offer would value the FTSE 250-listed company at 237p a share or roughly £2bn, a 3 per cent increase from its previous proposal of 230p a share.
“The board believes this latest proposal continues to undervalue the group and is therefore minded to reject [it],” Wood Group said in a statement on Tuesday.
The takeover attempts come as the Aberdeen-based company faces pressure from an activist shareholder to boost its share price.
Sparta Capital, founded in 2021 by former Elliott Management portfolio manager Franck Tuil, has called on Wood Group to buy back its stock to lift its valuation. The investment company has warned that Wood Group’s “significant undervaluation” makes it vulnerable to a takeover.
Apollo’s previous bid on January 26 offered 230p per share, a 55 per cent premium compared with Wood’s share price at the time and equivalent to approximately £1.9bn, taking net debt into account.
Wood Group shares gained more than 14 per cent to trade at about 222p per share during Tuesday morning trading in London.
The company’s “board will continue to engage with its shareholders and intends to engage further, on a limited basis, with Apollo”.
A representative for Apollo declined to comment.
The Scottish company provides consultation, management of assets and engineering services for the energy and materials sector, and recently expanded into clean energy projects such as wind farms. Its revenues last year rose about 8 per cent to $5.4bn.
Apollo is pursuing Wood Group at a time when the majority of FTSE 250 bosses believe UK-listed companies are vulnerable to foreign takeovers this year, amid growing expectations that mergers and acquisitions activity will pick up as economic conditions improve.
Another US fund, Providence Equity, has made a takeover approach for the London-listed exhibition company Hyve, a move that some top shareholders have called “opportunistic”.
Under the UK’s takeover regulations, Apollo has until March 22 to announce its firm intention to make an offer for Wood or walk away.
