Member Info for SG2025

@coldspy, I didn’t ask anyone to buy or sell, but was trying to seek alternate views to my hypothesis. I was also very clear for those deluded like yourself to filter my post out, but clearly dogs will bark. I ignored your last post, as first you implied it was obvious, then when I questioned, it was implied (which it still is not). I depend on facts and my research which I always question myself, and hence using this forum. Next time, instead of targeting anyone personally, be respectful for alternate views. You may be right or wrong, it has no bearing on me just like it is for you. I have always posted and clarified my posts as hypothesis, which again may be right or wrong - time will tell.

I am increasingly coming to believe the Sidara bid is increasingly unlikely. Be it good or bad.. Here is why.. To be clear, I am not questioning Wood's fundamentals or if the price is cheap or not. I can't make any fundamental views on the stock honestly having read more than 10 different research reports on WG over the last 2 weeks with varying analyst price targets (from as low as 5p based on ridiculous assumptions to as high as 100p on blue sky scenario). Nonetheless, i don't want to debate that here and would appreciate those with strong beliefs to filter this post out. For others, welcome debate these, particularly those with banking experience.

Anyone with corporate finance or inv banking experience (like me) would know how parties in a public M&A situation massage markets through selective leaks. I can bet that the last two FT leaks on WG were very much with the blessing of the company or their PR advisors. Anyhow, here is how I see it. If Sidara would have made even a preliminary bid, assuming it was significantly higher than the current SP, it would have similarly leaked to FT/media, as it helps lift the share price, and helps the management with both Sidara negotiations and particularly with lenders. You may ask why with lenders? - simple among the key ratios lending parties analyse as lending criteria are various leverage ratios, interest coverage etc, as well as Debt to tangible equity/ asset / market cap. It was this reasons why FT and analysts mention that the depressed SP makes it more difficult for WG to refinance their debt.

There is an alternative possibility that Sidara has not made any firm/preliminary offer and its all wishy-washy at the moment, but given the same Board and management refused several bid in recent past, and likely reluctant to go private - they will definitely loose their jobs. But again, feels very unlikely as these discussions are never done without a preliminary offer price as reference which may be privately negotiated up or down.

Another possibility is also they are discussing an asset sale (consulting business) instead of the full company as I mentioned in a previous post few days back (I still see this as more plausible scenario), this should have leaked this too for reasons I mentioned in the first scenario. Furthermore, if its an asset sale, it may be better conducted publicly with more potential buyers to create a tension and maximize sale value.

We may still have a leak in coming days, but the late it gets, I think the probability of a deal with Sidara goes down with the delay. I think its very unlikely we will have an RNS with a firm offer without an FT or credible leak ahead.

I have read the FT article twice and still can’t find where it states these discussions started before the takeover approach. Could you point out the line/comment from FT article ?

New article from FT on Wood's history. Nothing new though.

Wood Group finds bad M&A also comes in small packages

https://www.ft.com/content/7eb65877-619c-4568-8766-056f8454b759

Lol. people seem to know a lot more than FT - may be they should look at LSE.co.uk for news pieces on Woods. So many weird comments.

"As stated before, refinance talks were already under way days before any confirmation of Sidara interest."

Really, so they would have been having refinancing discussions before releasing their trading update - clearly not important to lenders - financials who cares, right? Equally, never heard of the Deloitte review, but the outcome why would the lenders care? Just refinance the company, afterall its such a large company (pipeline, EBITDA, etc.), nothing can ever go wrong. LOL

"Maybe they can see the bid failing so they are getting ahead of the game by sorting out the refinance"

Quite possible. Refinancing requires substantial efforts and quite unnecessary for the Company to commence unless its a low-ball bid or failing bid. Also possible that they are fishing with existing lenders for alternatives, but feedback from these excercies take time, so expecting a bid v soon would be wishful thinking. Also, unless the stock jumps 50% end of day tomorrow, it will drop out of FTSE 250 (FTSE announcement on Wed morning), which will mean some forced index selling in 2 weeks time when it becomes effective.

@DavidKov, For once you may indeed be right, but hopefully the situation gets diffused over the weekend, given there are far bigger geopolitical repercussions beyond our greed.

Unbelievable. That was very poor diplomacy by Zelenskyy, but I can understand he was put into corner by Trump, and he may have just burst out, but given how egoistic Trump and his team is, it’s going to backfire badly for Ukraine and in the process on Europe too, unless it resolves quickly over the weekend. But given how public it was, and seemed like it was pre-planned by Zelenskyy, very unlikely it will diffuse quickly,

CEE stocks have had a 20-30% run as a cohort on positive sentiments driven by peace process and I would be very surprised if the same sentiment don’t turn on its flip and drag the shares more than what fundamentals may imply on Monday.. not making dooms day prediction, and wouldn’t predict the share fall, as it’s anyone’s guess, and if it falls excessively, I will be looking to buy. For Ukraine’s sake, hope the situation diffuse over the weekend or soon.

@Icecool - One of us is a nut case and its most likely me. Anyhow, I felt compelled to reply but will keep it short. but dont mind if I completely ignore you in future.

"@SG2025, you’re flailing here. Nobody said only AIM/startups go bust, that’s just a strawman argument because your actual points hold no weight. Wood isn’t in a liquidity crisis, isn’t on the brink, and isn’t some distressed basket case despite the desperate attempts to frame it that way."

> For the 100th f**king time, no is saying its going bust. Distress and going bust are two different things.

"Yes, I keep stating they turn cash flow positive in 2026, because that’s what’s projected. The fact that analysts estimate “low single-digit millions” just reinforces that it won’t be negative, which is exactly the point. The transition to positive FCF is what matters, not whether it’s $10M or $100M in the first year. That’s how a recovery works, incremental improvement, not overnight miracles."

> Just like mgmt and analysts were predicting WG will go FCF +ve in 2024, then 2025 and now 2026?? What I am trying to tell you is that there is very low error of margin. It can easily move to -ve if refinancing for example come at a higher cost, which it will most likely.

"Don’t kid anyone!! 🤣🤣 you’re not here for “rational discussion.” You’re here to push a contrarian narrative that collapses under scrutiny. If you’re so convinced of doom, why are you even here? Just short it and move on instead of playing the concerned investor act. No one’s buying it. 👍💯💯"

> Have you ever lost an argument. I can bet not.

@Icecool. Do you mean to say only AIM /startups go bust - and a multi-billion-dollar engineering giant can not go bust!! Anyhow I am not saying WG is going bust, so lets not exaggerate. Also, you can be naive to believe word to word on published statements. I never spoke of a mythical black hole. But no point explaining these points. You keep stating cash flow positive from 2026 - do you know how much positive - $1, $100m or $1bn? Most analysts are estimating low single digit million. You keep making vague statements, but I would really appreciate more facts. I will ignore your further posts and suggest you do the same for me as likely we have very different perspectives and I can not keep correcting you since you are clearly minded to ignore rationale discussion and want to shut any contrarian views. Before you say, I dont have any ulterior motives, but interested in stimulating discussions even if purely theoretical, with other fellow investors.

@bandit1, you are right. I don't expect them to do a rights issue anytime soon. I did say in a previous post, that they can not do a rights issue until H2 at the earliest even if they wanted to. I only meant it as to when and if they do raise a new equity.

"@SG2025 How did Sidara determine its previous offers? Fundamentally, nothing has changed. The debt was always going to be restructured, and the order book has only grown. What people fail to grasp is that Wood is not in distress."

@Icecool. To answer your question, I will need to explain how corporate M&A process work. But anyhow, I will try to summarise. They made a preliminary / non-binding offer based on public filings / disclosures, just like we think about their fundamentals. When the company opens its books, they provide more details on account by account / project by project by project accounts, get into more detailed diligence sessions with management along with their advisors / bankers etc - these are never in public domain. Sidara (as Apollo did) decided not to make a firm offer and you/I/others can only speculate on their reasons. Fact is we do not know. I wouldnt rely on their public statements as they can not really state the obvious given the DD findings are confidential and they are subject to NDAs not to reveal anything from this excercise.

Did they spot inconsistencies on the accounts (quite unlikely as they don't usually get to the details on accounts/governance as Deloitte as reviewer for WG's accountants does, but possible their own accountants who were reviewing WG's detailed statements declined to validate their DD. My suspicion is that when they reviewed account/project by account/project detailed financials, they may have realised that their preliminary bid vastly overvalued the firm. Now that they have come back to the table on their own is a positive sign and hence I am invested, but we do not the level of rot in the Company.

Also, there are obvious signs that WG is in distress. We can counter arguments for it. I do really hope that you indeed proven out to be right that the "short-term SP fluctuations are just noise".

"Second, your EV calculation conveniently ignores the fact that Wood isn’t some desperate, debt-ridden basket case. It has a £6.2bn order book, double-digit EBITDA growth, and positive FCF from 2026, none of which scream “distress sale.” And let’s not pretend the market cap reflects true value after weeks of sentiment-driven selling."

I have rebutted

@YorkshireBlues. I can bet no one on this forum knows exactly what they are looking to do or what their negotiations with WG is coming along. They are looking to make a cash offer, but we do not know how the negotiations will shape up. In anycase, like I stated in my email - its an alternate case and theoretically speaking, I think it is an interesting and plausible/potential scenario which might please both Sidara and existing WG board/management. But who knows.

thanks @denziiil. don't think i flagged the downsides, but tried to be more balanced. anyhow, not that i am chatty, few more food for thoughts here. would be interested in some sensible discussion if possible.

1) agree with denziil. wg has a lot of intangibles on its b/s. an obvious outcome from deloitte should be to write them off. this may have an implication with lenders, but i am not fully clear what exactly. welcome any thoughts if so from others.

2) also, a rights issue is the only possible route for the company to raise any new equity capital. a preferential equity placing to an outsider like sidara is also theoretically possible, but quite unlikely as it will **** off their existing shareholders given the share price levels.

3) an alternate possibility (theoretically speaking) here could be sg sells some assets / subsidiary to sidara instead of the whole company - this will be a save the board from lots of humiliation and therefore quite a plausible scenario, but dont know how appealing to sidara and if so what assets / subsidiary. this way, they do not have to depend on deloitte outcome or even a shareholder vote depending on the size of the asset etc. welcome any views (theoretically speaking), how would the sp move if such a scenario were to play out and how feasible etc.

@ LWHL - All valid and very good points - thanks. Fully concur and don't think VLX will come back on this. A new bidder, if there is any, will likely be in a better position to put an offer now though given recent debacle. However, if there were to be another bidder, there was no reason for them to out-bid previously during VLX bid, particularly with an all-cash offer at similar price as VLX. However, it is quite unlikely the Board will support another bid at similar or below than what VLX offered. So, it feels low probability to think of a new M&A play here soon, but who knows.

Sorry - this post in reply to @officemanager - "SG , you've made your money on WG., you told us though, so why lurk about here ?."

Enjoying the forum (hopefully not long before I am bashed too). Anyhow I sold out at 35, but came back with a smaller than earlier position (around similar levels) as a punt when I reanalysed and concluded Sidara should offer north of 50p if they were to indeed make an offer. However, prepared if they do not, in which case, I will book my losses, though not much than I made earlier.

@Thornogson - Fundamentals are subjective and as unpredictable as future predictions, but share price is objective and reflects present. Company's fundamentals have not changed and suddenly become all rosy. Management has been saying the same for over 3 years, but still the share price has lost over 80% of its value. Anyhow, there is a floor to any valuation and that's why I came into the stock in low 20s having being on the sidelines over last year. Don't get me wrong, I want to see a deal come through at the highest price possible, but grounded in my expectations.

Also, given Volex's last offer was part cash and part stock, they will need a higher share price to justify a similar bid, or otherwise come up with a lower bid, which may be acceptable to most investors, but unlikely for most institutions given the last bid was very recent. This may change if there is another bid, but in that case, Volex is unlikely to be a strong bidder vs other names you mentioned..

Thanks @Adastra. Can't comment on other named bidders in your post, as I need to do my own analysis to form views, but I should point out that Volex are restricted to bid for another 6 months

Under Rule 35.1 of the UK Takeover Code, if a bidder has withdrawn an offer or had it rejected, they are prevented from making another bid for the same target within six months, unless one of the following exceptions applies:

1) A New Offer from a Third Party – If another company makes a formal offer for the target, the original bidder is allowed to return and make a new bid.

2) Recommendation by the Target Board – If the target company’s board changes its stance and decides to recommend an offer from the original bidder, they can make a new approach.

3) Material Change in Circumstances – If there is a significant change in the situation of either the bidder or the target (e.g., financial distress, regulatory changes, or major shifts in shareholder structure), the UK Takeover Panel may permit a new bid.

4) Bidder Announced a "Possible Offer" Before Withdrawal – If the bidder had previously announced an intention to make an offer before withdrawing, the Takeover Panel may allow a revised bid within six months.

5) Whitewash Procedure – If the target agrees to a transaction that would require a shareholder vote under the Takeover Code (e.g., a reverse takeover), the Takeover Panel may permit a renewed approach.

If Volex wants to rebid for TT Electronics within six months, they would need to rely on one of these exceptions.

The most likely route would be if TT Electronics' board changed its position or if another bidder emerged.