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(Alliance News) - John Wood Group PLC on Monday said it is "minded to recommend" an around GBP240 million proposed offer from Dar Al-Handasah Consultants Shair and Partners Holdings Ltd, known as Sidara.
The Aberdeen-based oilfield and engineering services said Sidara plans a USD450 million capital injection into the company, alongside the proposed 35 pence per share cash bid.
In response, shares in John Wood rose 8.8% to 27.21 pence each in London on Monday, giving the company a GBP187 million market capitalisation.
Sidara said it has made "significant progress" with its due diligence, including in relation to its review of the points raised in the independent review commissioned by John Wood.
The review, conducted by accountancy and audit firm Deloitte found "material weaknesses and failures" in the "financial culture" of John Wood's Projects division.
As a result of the review, John Wood said it expects to make a number of prior year adjustments to the income statement and balance sheet, within the division.
In February, John Wood announced cost cuts and also said that Arvind Balan had stepped down as finance chief, after it emerged that his professional qualifications had been incorrectly described in public statements.
On Monday, John Wood said it continues on a range of alternative refinancing options to provide an "appropriate and sustainable" long-term capital structure.
"Having carefully considered the viability of these options together with its financial advisers, the board of Wood currently believes that the possible offer represents the better option for Wood's shareholders, creditors and other stakeholders," it added.
John Wood said it is seeking an extension of its existing committed debt facilities.
Talks between the two firms broke down last year after Sidara made a series of attempts to buy the business. Sidara's final tilt, priced around 230p per share, valued John Wood at GBP1.58 billion.
In May 2023, John Wood rejected the fifth in a series of bids from Apollo Global Management, with the final approach worth 240p per share, or around GBP1.7 billion, nine times Wood's current market cap.
By Jeremy Cutler, Alliance News reporter
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