John Wood Group has granted Apollo Management access to due diligence materials, as the 'put-up-or-shut-up' deal deadline nears.
On 4 April, the US asset manager submitted a fifth proposal to acquire the oil and gas engineering consultancy's entire issued ordinary capital at a final price of 240p per share in cash - valuing Wood at around £1.7bn.
This final proposal was subject to a number of pre-conditions, including satisfactory completion of due diligence.
Wood's board remains confident in its strategic direction and long-term prospects, following a "transformative year in 2022", including new executive leadership and a new strategy.
However, a statement today noted that "having now weighed all relevant factors, particularly feedback received from Wood shareholders", the board has decided to engage with Apollo to see if a firm offer can be made on the same financial terms as the final proposal.
Apollo has stated to the board that it values the skills and capabilities of Wood's employees and believes the company is well positioned in its markets and at the forefront of the energy transition.
Wood has therefore requested - and the Panel on Takeovers and Mergers has consented to - an extension to the date by which Apollo is required either to announce a firm intention to make an offer - moving from 19 April to 17 May.
Wood’s stock rose more than 7% in morning trading on Monday following the decision to finally warm towards Apollo’s advances; having previously rejected four proposals from the firm.
Apollo’s fifth and final proposal represents a 17% premium to Wood’s closing share price on 3 April, the day before Apollo made the latest approach, and a 59% premium and 20% increase on the first approach.
The Aberdeen-headquartered consulting and engineering group now operates in more than 60 countries, employing over 35,000 people.
It offloaded its environmental consulting division last year in a move to reduce debt by £805m, while also promoting chief operating officer Ken Gilmartin to chief executive, ahead of a strategic overhaul focused on the shift from oil and gas towards renewable energy.
Wood has been left with a large debt pile since taking over rival Amec Foster Wheeler for £2.2bn in 2017, which also saw it face legacy lawsuits, including a £92.6m settlement made last year for a damages claim filed in 2016.
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