By Nicholas Earl
Oil and gas engineering giant John Wood Group is reportedly warming to a £1.7bn takeover offer from Apollo Global Management after previously rejecting multiple bids from the US private equity group.
After rejecting four proposals and refusing to engage with the bidder, Wood has now written to seek assurances on certain basic issues such as how the deal would be financed and whether there would be any competition problems, according to The Sunday Times.
Its final bid set at 240p per share, representing a 59 per cent premium and 20 per cent increase on the first approach.
Wood Group’s response is considered a prelude to opening full negotiations, and indicates the offer is getting close to being acceptable for Wood’s board, chaired by fossil fuel veteran Roy Franklin.
However, takeover rules mean Apollo must make a formal offer or walk away by the close of play on Wednesday – putting time pressures on the deal.
Barring a failure to satisfy Wood’s preliminary questions, Apollo can request a deadline extension while both sides negotiate.
Apollo and Wood have both been approached for comment on the report.
Wood employs 36,000 people, chiefly in engineering and consultancy for the energy, minerals, chemicals and life sciences sectors.
It sold its environmental consulting division last year, in a move that cut more than $1bn from its net debt, which now sits at $393m.
The group’s 2017 takeover of rival Amec Foster Wheeler for £2.2bn weighed the company down with debt and legacy lawsuits, including a damages claim settled for $115m.
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