Member Info for Denziiil

M Partners Capital LLC just bought 22,238,549 ~ 3.21%

Nice.

Yep, I sold out RR at £2.40 and never got my entry back sadly. Well done for holding.

Come on you dog, look what your little sister did today. Get up damnit !!

Not a normal bounce. Ill take it though.

I have already previously posted, but here again in case you missed it.

the 230p offered last year is long gone, particularly with reference to the $900M of write-downs which came after Sidara walked away. All things being equal that is c100p off the share price.

However there has been much concern here that the BOD would not entertain an offer, however if you read back through the Sidara offers last year, the BOD did in fact look to close the deal.

A lot of confidence going forward that this closes. GLA.

RNS Below.

5 June 2024

John Wood Group PLC ("Wood")

Further Statement regarding Final Proposal and extension to Put up or Shut up Deadline.

On 29 May 2024, Dar Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara") announced that it had submitted a fourth proposal to the Board of Wood (the "Board") to acquire the entire issued and to be issued ordinary share capital of Wood at a final price of 230p1 per share in cash (the "Final Proposal").

The Board remains confident in Wood's strategic direction and its fundamental prospects. However, having now weighed all relevant factors including, in particular, feedback received from Wood shareholders, the Board has decided to engage with Sidara to determine if a firm offer can be made on the same financial terms as the Final Proposal. Accordingly, the Board will grant Sidara access to due diligence materials.

People trying to read tea-leaves here.

Iain Torrens is a great appointment. Th e company absolutely needs a CFO, and Torrens comes with a wealth of experience, and yes including the capital markets.

This brings experience to the table for the negotiated bid and further and backstop to steady the finances should the proposed bid fall away.

An outcome will not happen overnight and a lot here need to learn a substantial amount of patience.

All outcomes covered.

There's turnarounds, and then there's snashing it out of the park.

A joy to read that this am.

Many plcs have found their schemes in surplus due to inflation and are taking the opprrunity to offload the pensions. Of course it would not happen over night , but I do think the surplus cash would be there if bounced out to LGEN or the like.

In August 2024, John Wood Group reported a $983 million pre-tax loss for the first half of the year, primarily due to significant write-downs:

Goodwill Impairment: $815 million related to legacy acquisitions in the Projects business.

Exceptional Charges: $140 million associated with exiting lump-sum turnkey and large-scale engineering, procurement, and construction contracts.

If Sidara fully adjusts for the £757.5M in write-downs, their new offer could drop from 230p to ~116p per share.

I do not think it unreasonable to suggest this may be, or certainly put weight on a new starting figure.

Thought I would throw it out to you all.

Again you have to weigh against a company with $450M ebitda.

GLA.

Which is exactly the point of pointing out the pointless sometimes.

An approved offer will be put forward to shareholders as recommended by the BOD, to vote on, with a proposed completion date if successful.

SP will close the gap reasonably well.

Sidara made a series of four acquisition proposals to John Wood Group in 2024:

1. First Proposal: In April 2024, Sidara submitted an initial offer to acquire John Wood Group. The specific financial terms of this initial proposal were not publicly disclosed.

2. Second Proposal: Following the initial offer, Sidara made a second proposal in May 2024, increasing the offer price to 205 pence per share.

3. Third Proposal: Later in May 2024, Sidara raised its offer to 220 pence per share, reflecting its continued interest in acquiring the company.

4. Final Proposal: On May 29, 2024, Sidara presented its fourth and final offer, valuing John Wood Group at 230 pence per share, approximately £1.56 billion. This offer represented a premium of 52% over the company's closing share price before the initial bid. Despite the increased offer, John Wood Group's board rejected the proposal, leading Sidara to withdraw its bid in August 2024, citing rising geopolitical risks and financial market uncertainty.

I don't very often get the filter button out. However today turned out to be a big day.

That's so much better!!

I personally thought there was nothing wrong with the EV calcs, and there a quite a few ways to value the company.

Starting with current ebitda multiples and the debt position,

Current Total Adjusted EBITDA (FY24): $450M

Consulting Division EBITDA: $85M

If Wood Group sells its Consulting division to eliminate its $690M debt, it would retain an EBITDA of $365M. At a 5x multiple, the remaining business would be valued at around $1.83B, leaving a leaner, debt-free engineering and project services firm but without its higher-margin consulting arm.

$1.83B valuation with 691M share in issue would value the shares at 265p.

Thus the query, and the market valuation right now of sub £300M.

Well there is a lot going on in-company to turn things around and Ed Windiband is doing hi best to shut down the NS.

But my gut tells me that the valuation certainly is not 265p and therefore the EV calcs are much more accurate.

The one thing remains that a company with an ebitda of $450M plus currengt debt, should be multiples above here.

GLA and thanks to the posters who bring decent thoughts to the chat.

Agreed and well done and flagging the downside.

I think a discount placing could happen. Of course it could. However the compnay would look to dispose of the consultation arm equally.

I personally think the company had to write down assets, possibly after sale negotations last year brought discrepancies to light.

This is a huge compmay with solid ebitda and a solvable debt problem.

Purchasers aren't back at the table for no reason, and I am very happy to play the waiting game.

GLA.

Really good posts. Thanks LNH.

Many if you could do with reading his post history.

GlA

Agreed on the leases Wiggly,

Lease liabilities are treated as debt, but they don’t require a lump sum repayment like loans.

A buyer like Sidara could renegotiate leases post-acquisition, potentially reducing this liability.

If a large portion of debt is tied to long-term leases, the company’s actual financial flexibility is higher than it appears.

I ran similar numbers yesterday FH.

Although the consulting business valuation $1B seems high.

Consulting Arm’s EBITDA (FY24)

Reported Adjusted EBITDA: ~$85 million

This accounts for ~19% of Wood Group’s total EBITDA ($450M-$460M)

Possible valuation for the arm $6-700M.

Leaves some debt, but after going through everything, I have raised my forecast here to £1.40.

GlA

Oops.

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https://www.ft.com/content/e95b2a80-dd85-4163-bd76-3b316670d981?utm_source=chatgpt.com

Wood has explored other options including a possible break-up of the business led by the sale of its consulting arm, according to two people familiar with the talks.

The people said the consulting business could be valued at more than £1bn, enough to right-size the parent company’s debt load now that an equity raise would be challenging.

But the board’s preference was to sell the entire company, two people familiar with the talks said, putting Sidara in pole position.

Consulting arm is loosely worth the company debt pile.

Given the case the rest of the company is worth multiples more than at present.