Member Info for lightnotheat

I have topped up twice so far today at around 18.5p

They probably need the cash if they are to publish a going concern statement in the Accounts

Ok let's look at this rationally. The conditions that need to be satisfied before there is any hope of a deal going through are (1) an extension of lending waivers (2) publication of accounts (3) unanimous Board approval. Even the Sidara could walk away or offer a lower price.

Taking these in turn. (1) I would see it as a massive own goal for the lenders not to extend their waivers although the position with noteholders is a bit opaque. Why would you not extend the waivers when your security has been bolstered by a fresh debt injection which will be subordinated to your own interests?

(2) From what we know so far, I see no problem in the Accounts being published within the required period of 6 months from the end of April

(3) Board approval has already been given.

The real risk is not the pre conditions for the bid but the fact that despite achieving these Sidara could walk away or lower its offer price. While Sidara has walked away before, I think that has shown itself very keen to acquire Sidara and put a considerable effort so far into doing so.

What about a lower offer price. The conditions for this are (a) there is a counter offer at a lower price (unlikely) (b) that the Board make a distribution to existing shareholders (very unlikely) (c) that there is unanimous agreement of the Board to a lower offer. So why would the Board endorse a significantly lower offer when the financial facts, so far as we know, have not change and therefore I would like that the Board will not recommend a second offer at anywhere near the current share price..

In summary, the real risk is that Sidara walks away taking it finance with it and Wood is required to institute a massively dilutive rights or debt for equity swap in order to appease its lenders. If Sidara walks away and Wood is forced into administration then Sidara would not easily pick up all the pieces it wants and both customers and employees could walk therefore damaging the franchise.

I am long and will not be cutting ahead of the end of the month at anywhere near current levels

I have always suggested @ICE that you were far too optimistic in your valuation and hands up I was too high along with everyone else but around half your suggested level. The facts are that a lot has changed. Do you not read the RNS announcements which foreshadow massive adjustments to the P&L and Balance sheet of Wood. I seriously doubt that these are just about goodwill write downs but reported revenue and tangible net assets will both be much lower - hence the bid at 35p. The one bit of good news is that H1 2024 adjusted figures appear unlikely to change. I think management were disingenuous in referencing no change to the ability of Wood to generate cash flow. I think this statement was misleading by omission as it did not say anything about the level of future revenue which surely will be much much lower than previously anticipated . So no statement on QUANTUM of revenue has been made.

So tell me @Ice Cool why would existing lenders not provide an extension of waivers when their position is being shored up by contributions from Sidara which will be subordinated to their own security once the deal goes through?

Sidara cannot offer a lower price unless someone else comes in and offers a price below 35p, or Wood makes a distribution or the Wood BoD accepts a lower offer. The BoD would look very stupid accepting an offer 40% below the 35p offer. So either the deal goes through or Wood walks away

What are the permutations and guestimated odds.

1. No deal at all -30% - Sidara has shown a lot of interest and expended a lot of money up to now

2 A reduced price -50%? However if the price was going to be reduced to anything like the current share price you would have thought that something would have been said as part of the 15th April RNS

3. No extension of lending waivers or agreed refinancing -10%. The key here is that Sidara's money will be subordinated to that of other lenders on completion of the deal

4. The Accounts don't get published in time ie 6 months from the end of April -5%

5.The bid goes through at 35p -real guess here. 25%??? I would like to think higher but have somewhat lost confidence

6 An alternative bidder such as Apollo -10%

That is what I worry about. However Sidara has invested a lot to get Wood and asked for several extensions. I has done the vast majority of the due diligence and has allowed Wood to put out business updates without suggesting that it will lower its bid or walk away. Although history may not be a complete guide, I think that Sidara really wants Wood. Like you my problem is what the share price is telling us; it is certainly not expressing confidence that a bid of 35p is going through. Despite that I remain long of the shares with the hope that the current share price is a reflection of institutions unwilling to buy more stock into a share suspension and retail investors offering no real counterweight to selling by those that want to get out. I do however worry what message the share price is sending.

I think that assuming we get an extension of the lending waivers and no further bad news, I would expect the gap to the offer price to close up although remain at a significant discount going into the share suspension. If agreement to extend the lending waivers does not move the share price up at all then all us long boys and girls are in big trouble.

All fair points SG2025, though they will have known the offer price and if they thought at the time it was totally unacceptable it would have been hard/impossible for the Board to put the statement out recommending it. I accept that they would have not have had complete information to make an accurate assessment but they must have formed a view that the offer was at least in the right ball park. I accept that this does not absolutely commit them to accepting it.

They must say something about the lending waivers pretty soon. The question is whether that is accompanied by some form of an update either on trading, the bid, the likely publication date for the accounts or all three. It will be an important announcement.

Cash is not capital. Read it carefully. Ability to generate cash is not the same as revenue quantum is unchanged.

Evidence?

Agree with much of SG's comments which mirror many of the points that I have been making. What @Ice does not appear to accept is that the 35p bid from Sidara would have been floated over the largest shareholders before it was announced, if they genuinely thought that it was ridiculously low - having probably been made insiders on the true state of affairs, the BoD could never have recommended it. The fact that they have suggest institutional backing. The current discount to the contingent bid price is telling us:

1. The bid will not proceed - unlikely in my view

2. The offer price will be lowered - agree with SG that this is possible and I probably worry about this more than SG

3. That the lenders will fail to agree either an extension of the waivers or a refinancing. Unlikely as Sidara's funding is subordinated to that of existing lending when the deal goes through, so why throw your toys out of the pram

4. No institution is going to buy shares in a company which is about to lose its liquidity. Share price reflects bits of retail buying swamped by institutions and others who want to get out and cut loss or risk before liquidity is removed.

Either way the shares are very cheap or very expensive with a spread of 5 or 6p to 35p+.

5. The Accounts won't get published within the 6 month time period allowed. Unlikely

Sidara have walked away before even after due diligence and may do so again. I think we will see some really nasty adjustments when the figures come out with what must be a significant hit to tangible net assets. That said I remain long and have added, despite the share price suggesting that this deal may be dead. If that happens and no other bidder emerges even with a management clear out the share price will be single digits. While I know @Ice has suggested that the low share price is a deliberate ploy from institutional shareholders to squeeze the management, I disagree even though I do agree that management are finished.

The unambiguous fact is that Wood needs more capital . Removal of the management will not deliver this on its own. The idea that the lenders would somehow carry on as is but with new management is ridiculous. If the capital has to come from shareholders we would be either wholly or very largely wiped out.

I am long but this is the concern. I was looking this morning at the announcement when Sidara withdrew last time. It cited financial turmoil and geopolitical risks for its withdrawal... sound familiar! It also withdrew after completing its due diligence. So the market may be worrying about a repeat although given the price that Sidara is now proposing to buy Wood perhaps this time it will be different. Up to now I have assumed that Sidara's willingness to spent time, money and other resources over an extended period of time despite knowing of Wood's problems was a strong indicator that it intended to proceed, despite the fact that the bid announcement said that it could withdraw or lower its offer price even if all the pre bid conditions are met. I am hoping that the opportunity is too good for Sidara to pass up but the share price refuses to improve, so someone somewhere may know something that we don't!

What is your latest take @Ice on why the share price is down here. Please don't say institutions are putting a squeeze on Wood management which would have informed them of the bid before announcing it. I know you have bought more shares as have I but while I know why I have done it I would be interested to hear your logic

If there is significant net buying then at some stage it should be reflected in the share price,. Let's see what happens by the close today.

we are collectively missing something. i continue to be long and have added twice today.

the share price is not really moving. indeed if anything it is signaling a reduced offer from sidara or a withdrawal. the latter is unlikely, the former is possible but unjustifiable in my view and should have been indicated by now. it is no use bull****ting about market manipulation, institutional buying strike or other rubbish conspiracy theories. the market continues to tell us something and we are not hearing it. i topped up twice today.

This is possible. Apollo bid 5x and likely would not show its hand until audited accounts are published which would significantly reduce time, money and effort spent on due diligence. There is nothing at al in the share price for this and s even if it is a very low possibility it is in the current price for free.

I think when we eventually see the Accounts they will be horrible, all carrying goodwill will have gone and probably tangible equity will have also come down somewhat - hence the low price being offered by Sidara.

I am long and have topped up twice so far today. I think the deal will go through. The major risk is a reduction in the share price by Sidara due to pressure by lenders to inject more money. I sincerely hope not and think Sidara should have sussed this out by now and announced if it was planning to do this. I see no justification. The next crucial information will come soon and that will be what is happening re the lenders waivers which expire at the end of the month. Most likely they will extend them until the deal with Sidara is completed. Any announcement on the lenders might well be accompanied by an estimate timeline for the publication of the Accounts and even a further trading update and/or some numbers on the adjustments that are going to be required.