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Factors That Could Drive a Higher Takeover Price

Intrinsic Value Beyond Current Price:

If the current share price of 38p understates the intrinsic value of the company, buyers may still offer a price closer to the original 240p offer. This would require the board to demonstrate:

Strong revenue potential (e.g., from energy transition projects).

Improved cash flow or debt management (e.g., as highlighted in the Deloitte review).

Unique strategic assets that buyers would value (e.g., intellectual property, contracts, or market positioning).

Strategic Value to Buyers:

A buyer such as Apollo may still see Wood Group as an undervalued strategic asset, particularly if they believe they can unlock value through restructuring, cost-cutting, or synergies.

In this case, Apollo (or another buyer) might offer a premium closer to 100p–150p, which would still represent a significant markup over the current share price.

Competitive Bidding:

If multiple buyers emerge, bidding competition could drive the takeover price higher. While unlikely to reach the 240p levels seen in Apollo’s earlier offer, it could push the price toward the 150p–200p range.

Likely Takeover Price Range

Given the current share price of 38p, here’s what I believe might happen:

Realistic Range:

A realistic takeover price would likely fall between 76p and 152p per share, representing a 100%-300% premium over the current share price.

This range reflects typical premiums in distressed scenarios, adjusted for uncertainty around Wood Group’s financial health.

Optimistic Scenario:

If Wood Group can demonstrate clear intrinsic value or if a bidding war emerges, the price could rise to 150p–200p. However, this would require strong evidence that the current market price (38p) significantly undervalues the company.

Pessimistic Scenario:

If buyers view the company as deeply distressed or believe the market price accurately reflects its value, takeover offers could be as low as 50p–75p, with limited upside for shareholders.

Final Thoughts

The significant drop in Wood Group’s share price to 38p suggests that the company is now perceived as being in a distressed situation. While this creates an opportunity for buyers to negotiate lower prices, the Deloitte review and Wood Group’s strategic assets may still justify a premium that’s well above the current share price.

If the board can argue for the company’s intrinsic value, a takeover price in the range of 76p–152p seems plausible. However, without competitive bids or improved financial performance, it’s unlikely that offers will return to the 240p level previously rejected.

I just had a "conversation" with GPT about takeover - wordy, but I think interesting and realistic

A current share price of 38p is a significant change from the previously referenced 151p share price, and it drastically alters the context for any potential takeover. Such a low share price could reflect market pessimism about the company’s prospects, heightened financial challenges, or broader macroeconomic factors. Here, I’ll revise the analysis to reflect the new share price and its implications on a potential takeover price.

Key Considerations with a Share Price of 38p

Market Sentiment and Valuation:

A share price of 38p indicates that the market may have significant concerns about Wood Group's financial health, growth prospects, or ability to manage its debt.

The dramatic decline in share price suggests that confidence in the company has eroded since the rejected 240p offer from Apollo. This could make it harder for the board to justify a high premium unless clear evidence supports a turnaround.

Buyers may view the current share price as a reflection of distress and attempt to negotiate a lower takeover price, especially if they believe the company’s intrinsic value has weakened.

Takeover Premiums in Distressed Scenarios:

In scenarios where a company’s share price has been depressed, takeover premiums tend to be higher in percentage terms but lower in absolute terms. For example:

A typical 50% premium on 38p would result in a takeover price of 57p, which is far lower than the 240p previously offered.

However, if buyers see significant upside (e.g., through restructuring or synergies), they might still offer a substantial premium.

Apollo’s Perspective:

Apollo’s previous offer of 240p was based on Wood Group’s financials and market position at the time. With the share price now at 38p, Apollo (or other buyers) may reevaluate Wood Group’s value and offer far less, unless the company can provide evidence of strong future prospects or hidden intrinsic value.

If the current share price reflects market overreaction or temporary challenges, Apollo may see this as an opportunity to acquire the company at a lower price than initially offered.

Board’s Position:

The board must balance the current depressed market price with their perception of the company’s intrinsic value. While they previously rejected 240p, they might now have to consider much lower offers, especially if no recovery in share price seems likely.

Once Sidara do execute the takeover if they do what they have done so far they will retain the Wood name, Sidara is not a brand name recognised in the industry. Whereas their brands are fairly well recognised.

Shorts have increased. At face value it looks like a big increase (to 6.46%) - thats not really the case as one of the shorts had only decreased just below the 0.5% reporting level, and now has increased to that level. So it is an increase, but a small one. Brave folks who are doing that!

Did you get the impression that is an "offer" or a merger? - is this a suitably senior source?

It's not Sidara, it's an existing holder. They do want a sale though, Google their letter to the BOD last year

Anybody else astonished by the director holdings..? .. If I were a director with my current holding i'd make the top 3! James Oxford would be number 2 ... I don't get it.. anybody else have a view on this?

Can't help feeling like you're giving him more credibility than he deserves

I'm not sure I've seen anything well reasoned from them, not sure id pay any attention to it

Hosai it was this bit..,....Apollo, of course, has a reputation for being a window shopper and making cautious offers when it eventually moves on a purchase.

Interesting article from Bloomberg on Thursday. Much of it is stuff we all know. The last two paragraphs are interesting though... I wasn't aware of Apollo's attitude, maybe we can expect them back.....

"Corporations must be optimistic to get the best price from suitors. Equally, boards also have to be careful not to push them too far with the bait of accessing the books, given bidders can stroll off leaving the target damaged goods.

Apollo, of course, has a reputation for being a window shopper and making cautious offers when it eventually moves on a purchase. But when two bidders are vindicated in ditching a deal, the target should seriously explore why their assessment of value was more accurate than its own."

Island, the rns indicates a zero previous holding. What I'm not entirely sure I understand though is he proportion of cfds equities and cash. Also this is Barclays capital, on 26th Feb Barclays Bank released a tr1 indicating disposal of all of 5.15 % , this is what makes me think it's the bank moving things around within their organisations, but I'm not experienced enough to know for sure, hoping there is somebody clever out there who can confirm.

Could be Barclays moving shares around - but, that looks like another effective new investor at over another 5%. Bring it on!

MMS are thinking, that the PIs want to see the Friday afternoon rise resulting from fomo. So the MMs drop it like a stone, resulting in worried PIs selling in an unplanned manner. Result - the MMs hold more share to sell back to you at twice the price on Monday

They are not saying they purchased on their behalf. They are saying, "we are connected with sidara" & "we undertook these trades" -

Sworaf - hee we go again! -

Generally the stuff over there is very strange (an unusual bunch of folk) and not worth the bother for... every now and then there is a post from an employee - (wish they'd join here) including an update on winning work.... just so you don't have to go hunting - here's a copy ....

We kicked off March winning with many of our trusted, long term clients. Here’s the round-up:

•Shell UK – awarded extension of O&M Services.

•TAQA – awarded contract for Cormorant Alpha Leg Systems De-Energisation Offshore Execution

•Origin Energy (Australia) - three-year software as a service (SaaS) agreement to continue using our NEXUS software suite until the end of 2027. Origin has relied on NEXUS to manage their integrity and inspection processes since 2012.

•Saudi Aramco - awarded scope for benchmarking of Aramco's Power Systems organisation to identify best practice and performance gaps against industry peers and global standards, across ten key focus areas.

•International Finance Corporation (IFC) - appointed lead technical authority (LTA) for AMEA Power’s Abydos 2 Solar PV and BESS project in Egypt. 1GW of Solar and 600MWh of battery energy storage system (BESS), continuing our long-standing relationship with the client

In other news, Bernard Matthews is canvassing views from their poultry on opinions about a December 25th celebratory event :-)

Except today is Friday, and weekend of possible leaks may be on people's minds. Reality is we all need to see beyond a few days.

Due process confirming their holding. It remains at 2.96% - they did reduce that from 3.24% a few days ago. They are confirming that they are holding steady.