Member Info for lightnotheat

While I certainly agree re the management, I think we are still in the dark about how badly damaged the business has been; each update is materially worse than the preceding one and given the time they have spent investigating what went on I am surprised that they cannot get their Accounts out on time unless there are some fairly big nasties which require to be discussed and agreed. I think Wood has a leading franchise but how badly it has been damaged and what its big customers must be thinking I do not know. Either way it needs to be resolved asap if value is not to drain away or walk away.

That is one way of squaring the share price and offer price i.e. if it does not go through the share price will be 20p or lower. Perhaps this is what is happening. It makes sense re where the share price is but I still find it odd as shareholders would have been consulted before the 35 p offer was agreed by the Board.

Well done you if your average in price is well below 35p - you must have been an aggressive buyer recently given the historic share price

Even before Sidara appeared management - accepted disgraced - were signaling a need for more capital. What @Ice you seem to ignore is that covenants have been breached and that the lenders do not have the same level of security which they previously thought they had. To restore these covenants you probably need a combination of more profits and more capital. I agree that management do not want to (further) throw shareholders under a bus and if you read my posts throughout this situation you will see that I have commented how negative an equity funding or debt for equity swap would be for existing shareholders. This is precisely why management are saying the Sidara bid is the best option. You will say that management is not to be trusted but on this issue where there seems to be a clear need for additional funding they are unfortunately probably correct.

Institutions will have been consulted on the bid - at least the largest ones. Absence of buying is either (a) a belief that the bid will not go through for some reason or (b) an unwillingness to add to holdings under current management and with the shares about to be suspended at the end of the month, or (c) something else that I have been unable to work out.

I still think that there is a residual chance of a counter bid by Apollo or someone else and they are just biding their time until audited accounts are published which should significantly reduce if not remove the need for due diligence. If there were to be a counter bid then it would probably have to be 20% or more higher than the current bid. Unless the bid from Sidara is not going to go through there is obviously massive upside. If Wood end up on its own and equity needs to be raised you can do the sums of what a rights issue would need to be done at and the multiple of shares issued to raise say £400m-£500m, it is not pretty!

We will see if they reaffirm the cash flow forecast. I have some doubts and also that they can sell assets at the price needed to bridge the gap in 2025, hence the focus on the refinancing

One thing I agree on is that senior management is finished. If no Sidara, then Wood still needs to find the capital injection to satisfy its lenders. You think that will be simple if Wood was under new management; I would be far less confident on this.

As usual @Ice cool I disagree with you. No institution is going to buy a share where trading will be suspended for heaven knows how long.

I would love to think you are right but short positions need to be declared and unless I have missed it, I do not seen anything massive , so it is outright selling driving the share price down. We were collectively wrong to ignore what the share price was saying throughout the bid and the question is whether we are wrong again or if the price reflects the almost total absence of institutional buyers reluctant to get locked in without liquidity at the end of this month. I hope that it this.

I basically agree that Sidara wants Wood, has invested a lot of time and money doing due diligence etc and has consistently asked for extension to support its work. This does not signify that it will walk away. I also agree that II's have been consulted before 35p conditional offer was announced. Lenders have still to be sorted and the next announcement we have to hope for is either that this has happened or the waiver of the covenant breeches has been extended before the end of April. Lenders will sign up because Sidara's funding is subordinated to theirs once the deal goes through and it is in their interests to have a stronger company. Then there is the delay in publishing the Accounts but again I think this will be sorted within the 6 months allowed before delisting is required.

So why are the shares trading at this level. Well Sidara could in theory walk away even if all the conditions of its bid are satisfied - that is what is said in the RNS. However with this unlikely there must be another reason(s). I hope the answer is that there are a lot of sellers who want to get out before liquidity is removed at the end of the month and will get out at any price. Also I don't think there will be much if any new institutional buying ahead of the shares suspension. Beyond this I do not know as it seems the shares are very cheap right now. Unfortunately the share price has been an accurate signal so far about what is going on and so the fear is that I/we are all missing something which makes the bid unlikely to complete. What this something is I don't know.

Either this is a massive steal at the current price or we are totally deaf to what the market is saying. Which is it and why?

All very sensible and I am with you but am concerned that the share price is telling us something we are not hearing. I am hoping that it is only the lack of buyers into the suspension period and holders trying to dump stock just in case they are locked in for a couple of months and have either borrowed to finance their positions or are not allowed to hold suspended shares. The gap between the share price and the offer value is however a worry and following the share price would have been the thing to do throughout. I continue to be long at an average of 37p

I too have some small hope that Apollo will counterbid. Why have they not showed their hand so far? Why would they when the shares are about to be suspended and due diligence would need to be done so any bid would be very conditional. If I were wanting to bid, I would wait for the shares to return from suspension which will only happen when audited accounts are published. I would then be in a much better position to counterbid with few if any conditions attached once accounts are out.

What am I missing? Throughout the bid process, the share price has been a far more accurate signal of what was going on than the comments and views of various posters on this BB. I will not rehash these but simply ask for views on why the share price is at such a discount to the 35p conditional cash offer. Some possibilities are:

1. Sidara will pull out. Very unlikely unless it finds something additional very materially bad which would be odd given we know that it has already done extensive due diligence. I think that it wants Wood and has invested a lot of time and effort getting to this point.

2. Sidara offers a lower price. It has left itself the option to do this but again absent new very negative findings I think it would be hard for it to do this and even harder for the BOD of Wood to accept

3. Concern that Wood will not be able to produce its Accounts within 6 months from the end of April after which it would be forced to delist. I find this too very unlikely

4. Wood shares will not return to trading. Not sure about this but if the deal is still on then shareholders would still get paid

5. Lenders will not agree a refinancing. Again I find this unlikely given the injection planned by Sidara and the fact that this additional debt would be subordinate to existing lenders debt once the deal completes. The alternative of not agreeing a refinancing seems very unattractive to me.

6. Losses are being crystallized now before the shares are suspended and there are very few new buyers willing to put money in now and then have liquidity removed at the end of the month. I think this is plausible but still not enough to justify the massive discount to the conditional offer price.

So I am flumoxed. But someone somewhere probably knows what is going on and the share price is down at these levels for a reason - I just don't know what it is. Otherwise there is a massive profit to be made!

I hope that you are wrong! I am disconcerted about the lack of an announcement re an extension of the offer period which when I last checked has not been made. It needs to be made by 5pm tonight. I am hoping that it might be accompanied by a statement about either the lenders agreeing a refinancing subject to the Sidara bid going through or, less good, and extension of the covenant waivers which expire at the end of the month when the shares are due to be delisted while Wood finalises its Accounts. I too am worried a bit about the share price which could suggest a lower offer, a withdrawal or something else. I am hoping that the price reflects the fact that there are no institutional buyers at this level due to the loss of liquidity/exit at the end of the month which they cannot risk or are not allowed to risk.

@ice cool you forgot the bid where they said of all the capital raising options Sidara's was the best!

We are all surprised at the low ball offer although the share price was telling us this all along. So I was in the 50p-70p camp but was still well wrong. So I do wonder what the institutions knew which we did not. Clearly for an offer to be accepted at 35p or 80p including funding things must be much worse than the formal RNSs have hinted. I have suggested in the past that while cash flow generation is unaffected the amount of future revenue must be lower. Management refuse during the bid to say whether or not this is the case . I think we will all be interested to see the end game. First things first, we need an extension tomorrow

They will unfortunately only have accepted 35p after discussions with the largest shareholders or they could not really do this in my opinion. I agree that hopefully we will get an extension tomorrow and probably a suspension at the end of the month.

As I have said months ago, they need extra capital, which is not going to be achieved by selling a couple of assets. Without this there will be no refinancing. Covenants have been breached and need either to be restored or very unlikely weakened. Without this there is a company unable to provide a going concern statement as it will not be able to pay its debt when they become due in October next year. And no there is not plenty of time. Lenders will be reluctant to pull the plug but may be forced to do so if Sidara walks away. Institutions are not buying at current levels either because the deal is doomed - I do not - or because they will look incredibly stupid in front of their trustees if they put money into something where the shares are about to be suspended. Individuals my choose to take this "gamble" but ex some possible hedgies others will not. If you think it will be all right if Sidara walks away and everything will be fine with a new management, that is your choice but I personally think this goes well well beyond wishful thinking

Essentially we will know tomorrow whether Wood and Sidara agree to an extension. I think that they will but it will be curtains if not. I think the share price continues to drift lower despite the prospect of a bid at 35p because there are very few marginal buyers prepared to be locked in with no liquidity after the end of the month when the shares get suspended. Institutions are simply not going to buy and others will be taking avoiding action against the possibility that this will be a total loss which unfortunately it will be if Sidara withdraws. So buyers are only those individuals prepared to risk the bid happening and willing to have their funds locked up for perhaps another two months before the shares are hopefully relisted. For better or worse I am in that camp!