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Why set alarm? What about news on lending covenant breaches; got to come before shares are suspended and with it might come other updates

If Sidar goes away and no one else appears, Wood is left needing a capital injection to restore its balance sheet and lending covenants. Two ways to provide it: a massively dilutive rights issue of say 4 or 5 for 1 at say 12p to replace the debt that Sidara was going to provide. Even with the discount, institutions may be unwilling to underwrite the rights issue or take up their own rights, preferring instead to cut their losses. The alternative is a massive debt for equity swap. I concede that I might have been a bit dramatic and Wood could possibly survive but shareholders would be (nearly) wiped out. My personal view - and I am long the stock having also topped up twice recently - is that the deal will go through although I worry about the signal the share price is sending. Wood need to announce something on the lending waivers before the end of the month, if these are granted or better still the lenders say they will support Wood if the Sidara deal goes through then I would expect the shares to rally fairly strongly but still remain at a sizeable discount to the bid price reflecting the loss of liquidity at the end of the month and the remaining possibility that Sidara will withdraw or lower its bid. If you put a gun to my head then I am still more of a buyer than seller at these levels.

Indeed it should!

Slight hope of a counter bidder which would be unlikely to show its hand until the audited accounts are published. The question is whether we should be hoovering up all the stock at 20p or cutting our losses before the lights are switched off.

Share price is 20p for a reason. Either Sid going to walk away (unlikely) or offer a lower price (possible) or there are simply no buyers for a lot of stock that has been hanging around on Market Makers books (possible).

I do not want to misquote him but I believe that @Ice thinks that the shares are hear because the institutional shareholders are putting the squeeze on Wood's management and are going to reject the deal. Being polite, I think this is clearly wrong. For one thing the major shareholders would have been sounded out before Wood BoD indicated it would recommend the 35p bid and for another the shares would crater without a Sidara bid as a massive equity issuance would be highly likely or worse. @Ice feel free to correct if you are around!

Because they would look very foolish if they got zero! And they probably have more stock than they want and don't want to throw good money after bad. You keep saying that they have ages of time to sort out the finance; that is only true if the lenders play ball and extend the waivers; they are not going to do this without fresh capital - the B/S is going to look awful when we eventually see it.

No point institutions selling at this level in a market lacking in liquidity, they will only exacerbate their losses. Better to sit on hands and wait for 35 p bid or counter offer. Will see.

So here are the questions and possible answers to consider when deciding whether to buy or sell at current levels

Q1. Is Sidara going to bid or walk away

A 1. Bid. Why, because it has already invested a huge amount of resources and asked for several extension and we know that historically it has been very interested in Wood.

Q2. Will Sidara lower its offer price for Wood to nearer the current share price

A2. Possibly but keep in mind that it apparently already knows about Wood's problems and if the bid price was going to be lowered why was this not mentioned at the very recent RNS by Wood; it is inconceivable that Sidara would not have mentioned this to Wood.

Q3. Will Wood fail to produce audited accounts and relist within 6 months?

A3. No reason to suppose this is likely

Q4 Will Wood fail to get extended waivers from its lenders and fail in its ability to refinance

A4 Unlikely. Wood has a basically decent franchise and a large order book. Sidara has offered to put money in and crucially this should actually strengthen the position of existing lenders once the deal goes through as at that time Sidara's loans will become subordinated to those of existing lenders

Q5. Why is Wood's shares trading at current level.

A5. I could be wrong on one or more of 1-4 above but don't think so. Rather I hope the share price reflects the fact that there is a lot of stock being held by market makers from sales, perhaps some of which were days if not weeks ago. Market makers cannot find buyers as no big institution is going to buy stock in a company where the shares will become untradable at the end of the month - not something you will easily explain to your clients. So I am pinning my hopes on this and also short sellers (although there is not much evidence of this). Something is causing this disconnect between share price and conditional offer. The worry is that the market is signaling that this deal is not going through and the market is not often wrong. However I cannot work out what I am missing in the arguments above.

A second bidder is possible but you would have thought that Wood invited all and any offers. My residual hope is that a potential bidder will emerge once the Accounts have been published. By that time they will (a) know what Sidara will actually pay and so what they are up against (b) have avoided a lot of noise and expensive due diligence as the audited accounts will be out. If I were a bidder I would not bid now but wait, there is only upside from doing so.

Agree an intervention by Apollo is a longshot but they did make 5 previous bid attempts although things were different then. If you were Apollo you would wait for the Accounts were published before making any move. At the moment their intervention is in the price for free ie 0% chance is assumed

Will see but Sidara needs not to undermine its credibility as it has to operate in the real world and people have long memories

I am not sure why you are saying that Sidara is reluctant to inject cash when they have made a specific proposal to do so. Sidara has shown massive interest in Wood in the past and right now. They have expended considerable money getting to the current stage and have no reason to walk away now given that they pretty much know what the issues at Wood are. I agree that there is obviously a chance that they will change their mind but only if they discover something new and materially negative. They might also lower their offer price but again that depends on them finding new negative information. I agree that if Sidara walks away it will be very difficult for Wood (absent a new bidder) as they would need to get fresh financing and it is unclear how this might be achieved other than through a massive debt for equity swap which would wipe out existing shareholders - the Board know this and have clearly stated therefore that the Sidara offer represents the best alternative

There are clearly massive write downs to come as indicated in the business updates. I would expect that there will be massive goodwill write downs. These are of course non cash but if they exceed the carrying value of goodwill on the balance sheet then that will reduce tangible net assets. That may have happened as possibly inferred by the breach in the lending covenants and the need to inject fresh capital. I also wonder whether the cash cost of the legacy issues has risen substantially as a result of the review as material adjustments to historic P&L as well as Balance Sheet are envisaged. It is worth noting however that no change is anticipated in adjusted EBITDA or EBIT for H1 2024 which means that any adjustments to first half reported earning are almost certainly related to goodwill which is not part of the adjusted figures. This is of some small comfort. I am long and believe the Sidara bid will go through and that the current difference between the bid price and market price is primarily down to no institutional buying and MM's holding a lot of stock they bought at higher levels which they are trying to get rid of before the shares are suspended. Next key information will be before the suspension when we will learn whether the lenders have agreed to extend their waivers, agreed new refinancing subject to the Sidara bid proceeding or refused to play ball , in which case it will be very bad news. At the same time I would hope for an indication as to when the Accounts will be published and possibly a further trading update.

Long shot but not impossible is a bid from Apollo once the Accounts are out.

Ok re the rights issue but the asset disposals only help if they generate $200m above book value not $200m. We don't know whether this would be possible but I would suggest that $200m is the estimated gross proceeds and not the addition to capital which is what matters.

Clearly the higher the share price pre rights then the lower the dilution. Also I do not think you can do a rights issue when the shares are suspended. I am reluctant to support conspiracy theories on holding down the share price as they are almost certainly untrue. The share price is where it is because their is no significant institutional buying at this level and sellers who want to get out before the suspension OR because the Sidara deal is not going through...that is it

In order to get a rights issue underwritten in a situation like this you are looking at quite a large discount and therefore a price somewhat below 19p so 13-14p tops. You are also looking at a minimum of 4:1 at that price in order to raise a reasonable amount of capital...that is pretty dilutive, which is why management (yes I know!) have not suggested this and gone for the "better" option of an injection by Sidara. Someone needs to put capital into Wood, so Sidara, another bidder or shareholders; unfortunately the last option is the least desirable at the current price if the alternative is genuinely a 35p cash offer.

There is one further option - a renewed bid from Apollo which I think made no fewer than 6 offers for Wood. Of course much has changed and A may feel they had a very lucky escape or they may think that Wood is a bargain at this price. If I were them I would not show their hand until the Accounts have been published and therefore all investigatory work concluded. That saves them time and money but they will still have an opportunity to bid. While I attach a pretty low probability to this it is certainly in the price for nothing right now.

A couple of thoughts. First, no MM is going to want to be left holding any stock into the share suspension which is probably exacerbating the downward pressure caused by any sell orders. Second when we get the news on the lenders - which I hope will be either agreement on refinancing or perhaps an extension of the current waivers for a further period pending the completion of the Sidara bid then the shares should rally into the suspension to around 30p ( not closer to the offer price given the still existing uncertainties). If on the other hand the share price hardly moves or stays around this level or (unexpectedly) drops further then we know that we are all in deep trouble!

I am hoping the share price is where it is relative to the bid price because there are no institutional buyers of the stock ahead of the inevitable suspension of the shares and others who want to get out before they are locked in. The alternative is either that the deal with Sidara falls apart of it will offer an even lower price.

It is clear to me that Sidara is VERY keen to buy Wood and has invested significantly in doing so. I think that it can only offer a lower price if something new and materially negative emerges which seems unlikely given the amount of due diligence that it has done to date. Of course it could do what it wants and Wood would be in a difficult place to refuse but hopefully it would.

In terms of the lenders - we will know what they think before the shares are suspended as the current waiver only lasts until the end of the month. As I have said previously I think the lenders will agree as they will be in a stronger position particularly as the new money will be subordinated to the existing debt once the deal goes through.

Still, with the share price where it is I fear that I am missing something. I have topped up twice now but still worry that the share price - as it has done throughout this whole situation - is telling us something and we are not hearing it.

Neither you or I know what the true state of Wood is, although I note your comments on no further profit warnings etc. However I would be surprised post Trump tariffs etc if the value of realisations is still what had been penciled in. I see no real logic in the disconnection of the share price from a bid price where the conditions for the bid are highly likely to be met (although Sidara can still walk away even then). So to boringly repeat myself, either the Sidara bid will fail for some reason or there are currently no willing significant buyers prepared to purchase stock where there will be no liquidity from the end of April.

Before the end of April Wood will have to provide an update on its discussions with debt holders and might at the same time give a time table for the publication of its Accounts and return to listing. Not long to wait for these but both could be pretty price sensitive.

The problem is that you have been saying for months that the share price was disconnected from reality but reality must be measured in terms of what someone is prepared to value Wood at. The market has been clear on this and while you can postulate all sorts of theories on institutional shareholder strikes etc, the price of something is what is agreed between a willing buyer and willing seller. That is what worries me about the current share price although in this instance it could be due to the impending share suspension