Member Info for bandit1

Some on here should think a little more deeply into the tactics which will likely play out over the next few weeks. Sidara will of course wish to see the Deloitte report findings so as to ensure that there are no material issues which will impact Wood Group going forward. Retrospective, non-cash accounting adjustments will be of much less concern to a private offeror. Sidara’s advisers will use the Deloitte report and the Audited accounts along with new contracts to adjust their conditional offer as that is what happens in M&A transactions along with any adjustments for material warranties or indemnities required of which there will certainly be some, as is the nature of the business with large construction projects.

Crucially, Sidara will be acutely aware that should they fail to persuade institutional investors to vote for their offer, the BOD will likely reject any extension and Sidara will be locked out for another 6 months. Whether any offer is made public is a huge unknown but history tells me that some number will find its way out into the market. Meanwhile, the Deloitte report will be made public hopefully without any major additional banana skins, financing will be progressed and there will be opportunities for Worley or private equity ( stuffed with cash to spend) to have a pop at Wood with Sidara out of the frame ruing another failed attempt. Of course, should no-one else come along for a bite, Ken must be replaced as he has let down shareholders and the BOD in failing to deliver on the numbers which has precipitated the collapse of the share price, a new CFO is appointed with the proper qualifications and the Wood Group share price starts a slow and steady return to sector level valuation norms assuming of course they can convince the market that they can deliver latest EBITDA forecasts. The BOD all have big reputation's at stake too and much better to do a deal now, accept that they got a wrong last year and secure the future of the company than to try and play corporate games and let this opportunity go again.

Of course, no guarantees of a deal here and another few weeks to wait but let’s hope that the FT are forced to eat humble pie as they have gone down in my estimations with some amateur and questionable journalism which most can see right through. I have a big stake here and feeling fairly relaxed that it will be a six figure profit pay day or a £25K -£30 short term hit with good prospects of recovery. Nothing is a dead cert in this game but this is a better risk/reward than most IMO. Oh and no need to fret too much about the Rule 8.3 forms. I spent time at The Takeover Panel when my Bank send me on secondment in the 1990’s and these forms are only useful to get a snapshot at the start of the bid process to know which institutions will call the shots if and when a bid is tabled. Daily movements are just noise along the way…….

….it is unlikely that Sidara will go hostile…..

A merger is of course a possibility but one should ask whether there will be a listed vehicle at the end of negotiations or will the new merged entity go private. Ultimately a clear offer price is required for shareholders to make a determination when voting. I suspect that there will be synergies but these can be realised as part of a takeover. What we don’t know is whether Sidara are comfortable as a private company and I suspect that they are otherwise why have they not IPO’d? The scrutiny of a listed company is not for everyone and if you do not require to raise capital eg. have backers with deep pockets and/or a strong balance sheet than little incentive. So, my view is that there will be an agreed offer or WG will attempt to re-finance and sell assets as they have already outlined. As a final thought it is likely that Sidara will go hostile if WG turn down an indicative offer ( non-disclosed) unless a large number of institutional investors were minded to accept the offer ( made insiders) and the Board chose to stay independent. All IMO.

What a shambles this company has become. I suspect this has been known for a week or more given these questionable trades a week or so ago and the Board has been pouring over the wording for the RNS to soften the blow! Well that went well. All we need now is for Kestrel to buy the cheap shares and make a paultry offer and take it private. Simples.

Why does this matter some may say? Well, in M@A transactions the offeror’s share price, Sidara in this case, if it was listed, would often come under pressure when an offer period starts and especially so if a formal offer price, if/when made, is deemed high relative to either the bid price prior to the approach or indeed fair value as determined by a multitude of sector financial ratios based on latest audited figures and adjustments.

For me, the fact that Sidara is a private company in the Middle East with a lot of potential pipeline business as evidenced by others, a healthy balance sheet and I expect well heeled and long standing backers ( unable as yet to find who the main shareholders are) this gives me comfort that if they really want control of the IP here ( experienced employees and a superb client list) they will pay a fair price and will not be brow beaten or influenced by an irrational market as is sometimes the case if they were a listed entity. That is why I have increased a here this morning. Downside risk is manageable from my entry point as WG Board will have to have a credible and believable plan, if a lowish bid is turned down, to convince the Institutions to continue to back current management. I feel that Institutions are pretty hot atm. No guarantees in any of this but a good risk/reward play and all IMO.

This is a terrific interim hire. Hugely experienced across a variety of sectors and will provide much needed support and direction to the bid process and interacting with Deloittes’s as they finalise their review. He will be highly incentivised I suspect and buys the company time in case they have to appoint a permanent CFO should Sidara walk.

SG2025 - a couple thoughts. RI highly unlikely atm IMO. If Sidara walk away again the share price will return to 20p or below in my view without any further substantive statement from the Board about Deloitte review and re-financing plans. It would be suicide to raise at these levels and I am not sure there is a need to do so unless the Bankers made it a requirement on re-financing which I would not expect.

Re a sale of some assets, I do think this is a possibility. If WOOD management are worth their salt they will have a sum of the parts valuation to hand which,I would hope, their advisers will use as part of negotiations. As you know, the SOTP is often bigger than the combined value so could happen. What we don’t know is what parts Sidara are really keen on. The $1bn referenced in the FT was possibly a tease but who knows.

It is easy to be greedy in bid situations like this as there is huge ‘hope’ value especially for those who are under water. The Investment Banks advising both company’s spend a lot of time together. Respective management teams usually spend much less time together. Sidara will be guided by sector valuations and will discount fair value based on latest audited information, current forecasts, things they find during due diligence, etc. They will have calculated the synergies they can achieve but will not declare to WOOD. These could be significant. They will also recognise new contract wins assuming they are profitable along with the forward order book. There is much less emotion and more analysis than some people on here will appreciate. Ultimately, Sidara will attempt to pay as little as they can get away with but if they see value from a combination of the two companies with no serious banana skins, they will pay a fair price for it. The biggest unknown for me is whether the Chairman and Board of WOOD allow their egos to get in the way and believe they can once again turn Sidara down and trade out of this mess which is of their own managements making. That is why the current price cannot even hold 40p. That in itself should send the Board a signal that the market has no confidence in them and to stop talks the share price will surely return to 20p or below which will be a travesty and what then? Institutional investors will want blood if there is little transparency in how this can be turned around. A clean Deloittes report and progress on re-financing would have to come fast but trust takes a long time to earn and is lost very quickly as we have seen.

In a bid situation like this the advisers to WOOD and/or the Chairman/CEO will at the correct time talk to the main instititional shareholders bring them onto the inside and sound them out on the bid price. They will not buy or sell any shares when they are on the inside. There are more than 5% PI’s here and I would estimate 25%-30% as a lot classed as institutions are nominees such as Interactive Investor, HL, AJ Bell who hold PI shares.

IMO the market think atm that the cash offer ( remember that Sidara are a private company so no paper can be offered unless a new vehicle is set-up) will be heavily discounted to previous levels of 200p + as a result of the various issues recently highlighted. Sidaras advisers will want access to Deloittes findings so far to corroborate the recent statements about materiality and if they are content that this will not have material impact on the business will go through the numbers with a fine toothed comb to ensure there are no nasties in there as well as the new contracts which have been signed since their last due diligence. Remember that Sidara have all of their due diligence from last year and will only have to pour over new data so should make it much easier and quicker. Risk is that they find some nasties and with the CFO out this is another drag on the price despite the approach and expectation of a big uplift.

Sidara’s advisers will not want the offer price in the market at this stage so this will be tightly held and short funds will be trying very hard to get a hold of it, that is a given. Given that the Board of WOOD appear to have an over-inflated view of the value of the company based of previous transactions, that is why there is scepticism over the completion of a deal IMO. The WOOD Board will be wiped out on a deal and they will have to accept a much lower price for their personal equity than they hoped, hence the current price is hovering around 40p.

This could go either way but I feel that Sidara are very keen to acquire their larger competitor and probably won’t get a better chance. So, the instititions call the shots here as if the deal is fair based on everything that has gone on here and they can exit with 100p or hopefully more I feel they may take it as the alternatives with a beleaguered CEO, no CFO, poor track record of delivery and looming re-financing negotiations which are uncertain without a CFO, they could justify to their own Fund Boards that the uncertainty was such that a bird in the hand was the best call. I have a chunky stake here with a low average and am keen for a deal to be done quickly as I have no faith in the management. Sympathies to those with a much higher average, been their before many times but sometimes best to take the best offer and preserve capital for the next time.

SnipVW - perhaps but imagine if they reject a fair offer to save embarrassment that they rejected a much higher offer less than a year previously, the share price returns to 20p and there is a fund raise at a much lower level or even difficulties with refinancing? That would risk the company’s future. Much better to sell to a better run company at a fair price to preserve the future for the 30,000 employees is it not?

Sidara will be required to disclose whether they have acquired any shares in the market under Rule 8.1 of the Takeover Code so let’s see if they have. Also, I wasn’t aware that their revenues are half the size of WOOD and as a direct competitor in many markets will be bidding against them on most contracts and will have lost out as we have seen from recent contract wins so will know how well regarded they are. Sidara will apply their superior management and financial skills to a larger business and will see lots of opportunities/synergies to improve performance. Let’s hope they offer a fair sum and don’t walk away as I fear that it will be. long time before WOOD recover if the deal does not go ahead.

Oh and just to clear up nonsense poster by some on here earlier. Sidara did not make a Rule 9 offer ( buying through 30%) in fact they did not make any offer so the offer price this time if they make one can be at any level. For what it is worth I think they will have already submitted a non-binding indicative offer subject to DD and other conditions etc etc at a low level but will have a walk away price but will want an encouraging response asap from the embattled BOD if they are to bid up. I strongly suspect their advisers will hope to have this wrapped up quickly.

Well Fidelity and Schroders must be feeling pretty dim today. Perhaps their internal rules forced them to dump last couple of weeks but not impressed by their panic sells. Our BOD will still be reeling from the carnage of the past couple of weeks so will be under huge pressure to secure some sort of deal. To fail to recommend again may lead to a hostile bid of course. Our remaining institutional shareholders have a difficult decision to make as they will be asked to sign irrevocable undertakings at a price likely to be 100% or more lower than last summer!! Sometimes you have to accept a bird in the hand and this is one of those moments IMO.

This is extremely unusual price action in a bid situation with an offer of 125p already on the table. Clearly the market is sceptical but if this is pulled over the next few days the Board will have a lot of questions to answer. They will be aware of these trades as will the NOMAD. There is a very bad smell coming from this company and yet we hear nothing about the transaction. Like others I will be glad to get out here as the Board including Kestrel directors make me feel somewhat uncomfortable.

Sidara’s strategy IMO will be to put a fairly low number to the WOOD board and after some negotiation if they reject it out of hand or ask for too much Sidara should go hostile but do so quickly. This will enable them to Hoover up shares in the market at the offer price. If I was advising them I would move quickly before others get a chance to react.

Clearly this is being controlled to allow the short funds to exit without pushing it up too quickly. Bizarre that we are not seeing a 60-70% gain on the talks RNS.

FT are almost always on the money with bid talks. BOD will be forced by Takeover Panel to get out an RNS shortly today to confirm if true to avoid a false market. I expect that others may now throw their hats into the ring, probably Private Equity to avoid losing out to a cheap opportunistic bid.

So, our CFO made a huge character error, and paid the price without compensation, I hope. I wonder who pointed this out to the Chairman. Possibly Deloittes, possibly one of the institutions or even shorters, who knows. Poor show by company not doing their DD on a key hire. Multiple media releases since he joined described him as a CA and he was happy to be described as such which says a lot about him in my eyes, none of it good. In my past career in listed companies it was recognised by all of my peers that is was a complete ‘no no’ to have a CV out there which was embellished/ misleading in any way and our contracts were clear on this as you will be found out eventually but it seems that everyone is at it these days!!

Next steps are quite important here ( understatement of the year) and it seems that we have a lightweight Chairman who is acting like a rabbit in the headlines and communicating the bare minimum to shareholders which does not give me a lot of confidence. As a new shareholder who identified potential value at the first drop a few months ago and who has followed WOOD for a few years I think that the Board should be trying to find a buyer asap who can inject new management, capital and a sense of stability. Trying to hang on with minimal comms hoping that the vultures will find another target will end very badly in my experience. Announce a strategic review aka ‘seeking a buyer’ and this will buy the Board time. A sale at 100p could be possible but do something quickly or there will be nothing to salvage from this mess. And yes, the numbers are not as bad as the market reaction but a salutary lesson for any listed executive is if you get the messaging so badly wrong ( Deloittes review announced so soon after major financial adjustments)the. you will get slaughtered and that is what has just happened. Time for the Board to earn their generous salaries but the clock is ticking.

Droverman - over the last few weeks we have seen significant off-market purchases almost daily @10m, 20m, blocks. When added to the larger volumes today I strongly suspect that GDXJ have been accumulating heavily to catch up and have probably acquired over 100m if they are the principal buyer today. Don’t want people to get too carried away assuming that they still have a large gap to fill. Can’t be sure but that is what it looks like to me. All very positive nevertheless and no reason why we don’t continue to creep up as the news flow and Trump vol continues!

Hope1968 - has our media shy CEO done any interviews? I think you know the answer to that. He will be cowering away in an office somewhere looking out of the window as he did during the last media he did and folks will remember how poor that was. Is the drop overdone - perhaps but when you release little information and keep shareholders in the dark and then release one of the most I’ll-conceived RNS’s I have seen in my 40 years of investing, expect carnage. For me, this is about competence or lack thereof and a commercial arrangement which has shafted us as the FUM management are at the mercy of the distributors and their plans and actions. Clearly, the hiring of a brand manager is a reaction to the disappointing numbers. We hear nothing from any of our other Directors and the relatively new Chairman invisible too. The only hope we have is that Lombard are as frustrated as we are and force change as they are the only ones with any ability to do so. If the sales do not recover in 2025 meeting the hurdle rate this company is toast. LO will know that.