Member Info for Kando

@JO - How can there be a payout while in suspension, when the preconditions of the offer dictate the publication of audited FY24 accounts (which would then also end the suspension)?

Moreover, shareholders would then have the opportunity to vote on said offer, which would not be instantaneous.

The share is likely to be suspended until the audited accounts with prior year restatements are released, the suspension then ends, the conditional offer made firm, then shareholders would be asked to vote on it, then down the road you get a payout when the sale is concluded. You seem to be missing out many steps from your research.

"So extension hopefully and then wait for accounts to be published, into suspension and pray for another company to come in to rival Sid. If there is no competition then sidara could offer even less ☹️ "

Without accusing you of deliberately trying to mislead, but you clipped off the important conditionality of less favourable terms, ATrades.

"In accordance with Rule 2.5(a) of the Code, Sidara reserves the right to:

a) announce an offer for Wood on less favourable terms and conditions than those set out in this announcement:

I. with the agreement or consent of the Board of Wood; or

II. if a third party announces a possible offer or a firm intention to make an offer for Wood on less favourable terms than the Possible Offer; or

III. if Wood announces a Rule 9 waiver transaction pursuant to Appendix 1 of the Code or a reverse takeover (as defined in the Code); or

b) reduce its offer by the amount of any dividend or other distribution or return of capital to its shareholders that is announced, declared, made or paid by Wood after the date of this announcement and prior to completion."

So it can only be less if the board unanimously (per the other offer pre-conditions of board unanimity) agree to it being less, or they inexplicably announce a dividend, or someone else comes and bids less. So it's possible but improbable that they would bid any less. The board will already be uncomfortable recommending 35p, and any less might well change the equation on whether this offer represents the better option against other refinancing options.

"If bid was coming, with all the time spent doing due diligence. There offer would have been immediate. Still nothing imho"

It says it in the offer update, which by the sounds of it, you haven't read.

"Under Rule 2.6(a) of the Code, Sidara must, by not later than 5.00 p.m. on 17 April 2025, either announce a firm intention to make an offer for Wood in accordance with Rule 2.7 of the Code or to announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be further extended with the agreement of the Board of Wood and the consent of the Panel in accordance with Rule 2.6(c) of the Code. Wood and Sidara anticipate further extensions to this deadline being required in order to enable the pre-conditions to be satisfied (or waived)."

With one of the pre-conditions being:

"b) the publication of Wood's audited accounts for the financial year ended 31 December 2024;"

So no, there will be and never was going to a be a firm bid by the 17th, but an extension until the FY24 audited accounts are released. Whenever that may be.

"if lenders are willing to work with wood, which all signs point to, they could easily outline a refinancing path."

i'm sorry but other people aren't seeing these signs. we have a board recommending a sale as the best option, having found that they broke historic debt covenants; another company saying the situation is so bad they think 35p is all they need pay for it; the board saying that the sale is the least worse option over the discussions they've been having and continue to have with lenders. you say it's all very easy, but all the signals suggest they're finding it very hard.

35p is a **** offer. i had really hoped for closer to 70, but it's clear that we did not nor do we still know the scale of the restatements, covenant breaches, nor the current headroom on lending facilities in the future given covenant breaches, maybe they're about to be withdrawn. i don't know. no-one here knows. only the board and the auditors and their lenders will have some idea and at the moment they're saying the deal is better than not taking the deal. so it's all very disappointing, but it's useless trying to ramp this like it's all fine and it's just the board trying it on, hiding how great everything is, risking prosecution by taking backhanders for complicity in defrauding shareholders. you want to believe that to give you hope, but it just isn't likely so. a 35p offer made worse by trading at 22p says this is not fine. shorts in no rush to close and institutions in no rush to buy are telling us this is not fine.

"How can you state they are due, when they might be waived completely. Until an RNS officially arrives to say one or the other it’s totally irrelevant in the bigger picture. The Lenders are willing to work with Wood. The board just want to keep their jobs, hence no transparency on the options they have available."

If lenders are willing to work with Wood, why would the board and its financial advisors be recommending a sale then?

Surin. That they do, but they're not charities. They will flex and give waivers or extensions, but they're not going to waive the basic cost of lending. If they loaned money to Wood thinking they were low risk, and all that time Wood were a higher risk based on misstated accounts, they ate Wood's cost at their own expense. They will demand repayment of the accurate rate of interest for that loan and any penalty for additional costs incurred to them.

"All speculation. No RNS to say back payments or penalties are due, which would need to be issued. 👍"

How can they issue an RNS about back payments and penalties when they haven't finished restating and auditing years worth of accounts? They don't know what the payments or penalties are yet, hence the temporary waivers to cover them in the meantime.

"That’s totally rubbish they have said past and future cash generation unaffected and they also have waivers in place nice try though. 💯👍"

Sure, they have said past and future cash generation are unaffected, but what does that really mean. They can generate cash just as well as before, but have higher debt costs and carry on losing it just as quickly, no?

Also, those waivers are temporary. Ultimately, banks are not charities. There are terms that were breached with consequences that are contractual. They're not going to forgive penalties incurred, because it changed the risk of lending to Wood, so they will require compensation for that increased risk. They're not going to waive higher interest rates for riskier lending, it doesn't work like that.

"Even the way they re-released the Deloitte review, loaded with negative framing, looks like it was designed to drive the price lower and make the Sidara deal seem like a lifeline.

The whole thing screams collusion, not value creation."

Yes, clearly. But it's not a conspiracy. It may just be that the Board is right; that the situation is so acute with the lenders that a 35p buyout and recapitalization is the best and/or only option, and so have tempered and guided expectations down to the terms Sidara were willing to offer.

"I don’t see how this can be painted as catastrophic when debt isn’t due until Oct 2026 and guidance and cash generation remain unchanged. The covenant being breached were technical based on historical changes, not that they can’t pay."

Well, technical or not, they look to have breached them, and lenders will be demanding backpay for higher interest rates they would have charged in penalty from the point they were breached. They could also demand immediate repayment if they so wanted. Both of those things are catastrophic if the company isn't floating enough cash to cover those penalties and continue day to day cash burn. Cash flow positive this year would have made this situation much less acute, but they're still burning cash, and asking borrowers for more, while also admitting they borrowed from them historically on terms that they're now admitting they broke.

We all want a good outcome here, but you're not being real if you don't see the seriousness of the situation which led us to a 35p per share conditional offer.

"Today’s price action makes it clear, the deal is already dead in the market’s eyes. No one believes a word this board says anymore.

The next logical step? A vote of no confidence."

The price action is also pricing in the conditionality of the offer. It's a low offer discounted for the hoops that have to be jumped through just to get there.

The offer will be made after the FY24 accounts are audited, so essentially that takes it some time after share trading has been suspended. Uncertainty there on timeline.

There's the debt modications that require the assent of lenders, not just Wood, per the offer: "The Sidara Liquidity Arrangements and the Debt Modifications each require the agreement of Wood's lenders and noteholders. Wood and Sidara are engaging, and will continue to engage, with Wood's lenders and noteholders in relation to both the Sidara Liquidity Arrangements and the Debt Modifications." So there's more uncertainty about how the lenders will feel about Sidara's loans initially sitting pari passu with their own.

And then there's the unanimous recommendation of the Board. Is it unanimous yet?

Any or all of this can be waived by Sidara, as a pre-condition to the bid, but would they?

So, while it'll almost certainly get there (if both parties want it then they can make all that so), the market is going to price some uncertainty, of which, yes, some small amount might be the possibility of shareholder revolt, but the same was threatened of AA and that deal passed at 89%, over the 75% they needed. The market prices a board recommendation as a likely pass. Wood will know what the minimum price their major holders would have accepted, because they seem as eager as Sidara to get a sale over the line. 35p is a rubbish price, but it will pass if shareholders are spooked enough.

"• Sidara’s Capital Injection Offer – Offering £342m in financing before takeover completion is highly unusual and could be a way to create dependency, making rejection harder."

It's not that unusual, in fact it's identical to how AA's bid was structured, with a 35p per share bid and a £380m cash injection. AA's board's response was this:

“The board, having considered carefully the viability of a range of alternative potential debt and equity refinancing options together with its financial advisers, has indicated to the consortium that it would be willing to recommend a cash offer on the terms of the proposal. Accordingly, the company is engaged in advanced discussions with the consortium in relation to the possible offer.”

Which sounds familiar right?

I'd say this deal will go through once the audited FY24 accounts are cleared at 35p, unless a rival bidder shows up in the meantime. Sidara don't really have any real incentive to offer any more if Wood's board is already recommending it. They're not looking the generous sort - probably something to do with the reported orientalism they experienced from Wood and the prior rejected bids.

So you're right, it's by design. They know they are the only party in town at the moment. Care of its own commissioned review, Wood have apparently admitted to breaching historic covenants and are presumably facing much higher debt servicing costs and/or repayment demands, and in the parlous post-election world of Trumponomics, liquidity and easy lending has dried right up for them at the worst possible time. Wood are reading this as an ultimatum essentially: take the only cash injection that's on offer and sell yourselves out.

It will really only take a rival bidder to incrementally increase the offer price from here, or an unlikely about turn by lenders that give them another out to recapitalize the business. They just needed this year to be cash flow positive and there was a path to turn the ship around. Jam tomorrow promises on the back of inaccurate accounting wasn't going to cut it for lenders in 2025. Someone else in private equity could see value here for more than 35p though. It's pretty small change for really, in the context of things, not that much debt, and pretty healthy underlying earnings. There is a company that's part way fixed underneath the current crisis, that just needs 500m to weather the storm and carry on.

True, but while the company seems to prefer to sell itself whole, it was also prepared to make further disposals to cover this year's negative cash flow. It's possible not all of that funding would need to be raised, if they could sell more non-core assets.

As a counterpoint to some of the gloom today, there is at least now a double bottom on the chart if it holds it, and with a 35p proposal hanging above, there is scope for some significant upside. If, over the next 2 weeks someone else were to engage with the company, 35p might not be the absolute ceiling here.

35p with board acquiescence ought to be a final clarion call for other players to check out WG. Of course there's no guarantee anyone will, but 242 million isn't an awful lot to pay for 5bn+ revenue and 450 million ebitda that outwardly just needs a recapitalizing to weather a short term cash flow and debt maturation crisis. Sidara are looking to get it at firesale prices, but a firesale will not uncommonly attract multiple bidders.

But basically, the TA looks friendly for a buy/hold here at least. 24-30 probably the new near term trading range. Shorts will use it to get out of the way of the bid.

You are very right, I'd missed that. To a lesser extent then, 75%, it's still difficult to guess how many would be prepared to hold out.

I have doubts 35p would be enough to secure 90% approval. It is low. Today's update may turn out to be another expectations-setting exercise by both parties. If Sidara wait a few days and bid 50p a share, everyone then considers that now a much better deal, spared from the miserable 35p take-it-or-leave-it they were just reeling from and much happier to vote it through and call it a minor victory. It costs Sidara a modest ~110m more but secures what is otherwise a bargain. Against the risk that 11% of holders decide 35p really is too low, and maybe a punishing equity raise and longer term recovery play nets them much more than 35p in the long run.

Https://www.youtube.com/watch?v=R1cdJmDZMQw

It could be that the institutional players aren't buying this breakout on gold. I'm not 100% sold on it yet either. It feels a month or so early. It's still possible this is just the last bull trap before the real run, drawing even the most skeptical in, before the rug pull. There's possibly a scenario (which admittedly is getting less likely the more gold holds above) where gold drops back to $2310 and miners are 30% lower for a better entry point into the coming rally. But in the absence of.meaningful economic data, geopolitics or some black swan event, it's hard to see what's going to drag gold back down from here. Maybe J Pow at Jackson hole or the FOMC minutes tomorrow, but who knows.

Do you consider it bullish that it keeps rejecting the top of the channel?

Do you think it bullish that this market rally (miners included) is on such low volume?

It needs to break out above. Until then, it's just sucking in people at the top of the range to dump out at the bottom. Rinse and repeat.

If I'm wrong, I'll pop in to concede such, just for you.

Gold is going higher. What you perhaps don't understand is that it's not set up to go higher, YET. This is looking to draw people in for a big flush out. Then it goes higher.