REG - Wood Group (John)PLC - Update on Possible Offer

John WoodAnnouncement

14/04/2025 07:00

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RNS Number : 8591E  Wood Group (John) PLC  14 April 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS
AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM
INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE. THERE CAN BE NO
CERTAINTY THAT ANY FIRM OFFER WILL BE MADE EVEN IF THE PRE-CONDITIONS ARE
SATISFIED OR WAIVED

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

14 April 2025

 

John Wood Group plc ("Wood" or the "Company")

Update on Possible Offer

 

Summary

·      The Board of Wood has received a holistic non-binding conditional
proposal from Sidara, comprising:

o  a possible offer of 35 pence per Wood share in cash to acquire the entire
issued and to be issued share capital of the Company (the "Possible Offer");

o  a possible capital injection of $450 million from Sidara to Wood; and

o  Wood seeking an extension of, and certain other amendments to, its
existing committed debt facilities.

·      Sidara has confirmed that it has made significant progress with
its due diligence on Wood, including in relation to its review of the points
raised in the independent review commissioned by Wood.

·      Work continues on a range of alternative refinancing options to
provide the Company with an appropriate and sustainable long-term capital
structure. Having carefully considered the viability of these options together
with its financial advisers, the Board of Wood currently believes that the
Possible Offer represents the better option for Wood's shareholders, creditors
and other stakeholders.

·      Accordingly, the Board of Wood has indicated to Sidara that,
should a firm offer for Wood under Rule 2.7 of the Code for Wood on the terms
of the Possible Offer, it would be minded to recommend such an offer to Wood's
shareholders, subject to agreement of the full terms and conditions.

Background

On 24 February 2025, Wood announced that it had received an approach from Dar
Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara") in relation
to a possible cash offer for the entire issued and to be issued share capital
of the Company.

On 31 March 2025, Wood announced an update on an independent review being
conducted by Deloitte. That update noted that, in light of extensive work
needed to conclude its audit for FY24, it is now expected that the Company
will not publish its FY24 accounts by 30 April 2025 and, in that case, the
Company's shares would be suspended from trading from that time as work
progresses towards completion of its FY24 accounts.

Possible offer from Sidara and pre-conditions to an Offer being made

Following discussions between Wood and Sidara, the Board of Wood has now
received a holistic non-binding conditional proposal for Wood, comprising:

·      a possible offer from Sidara of 35 pence per Wood share in cash
to acquire the entire issued and to be issued share capital of the Company;

·      a capital injection of $450 million from Sidara to Wood, as
detailed below; and

·      Wood seeking an extension of, and certain other amendments to,
its existing committed debt facilities (the "Debt Modifications").

Sidara has confirmed that it has made significant progress with its due
diligence on Wood, including in relation to its review of the points raised in
the independent review commissioned by Wood.

The announcement by Sidara of any firm offer for Wood under Rule 2.7 of the
Code (an "Offer") is subject to the satisfaction or waiver of certain
pre-conditions, including:

a)   legally binding agreement(s) in a form satisfactory to Sidara being
entered into in respect of the Debt Modifications and the Sidara Liquidity
Arrangements (as defined below);

b)   the publication of Wood's audited accounts for the financial year ended
31 December 2024;

c)   the unanimous recommendation of such Offer by the Wood Board of
Directors and irrevocable undertakings from such directors who hold Wood
shares to vote in favour of the Offer;

d)   completion of Sidara's due diligence; and

e)   final approval of the Sidara Board of Directors.

Sidara has confirmed to the Board of Wood that, if the Offer is made, it
intends to commit to Wood that it will take all required, necessary or
advisable steps to satisfy all antitrust and regulatory conditions to the
Offer, subject to certain limited carve-outs in the case of regulatory
approvals.

Attractive proposition for Wood's customers and employees

The proposed combination of Wood and Sidara would create a leading global
engineering consulting company with enhanced scale, capability and
diversification. By bringing together Wood's deep domain experience with
Sidara's specialist strengths in Energy & Materials, the combined business
would be well-positioned to lead and grow in these attractive global markets.

Sidara's long-term strategic commitment to the energy transition, combined
with its complementary end markets and strong geographic reach - particularly
in the US and Middle East - is expected to enhance Wood's established
market-leading position and create opportunities for sustainable, scalable
growth.

Sidara has a strong track record of its acquired businesses prospering within
the group. Wood would continue to operate as a standalone, client-facing
brand, maintaining its identity and trusted client relationships. This would
ensure business continuity for existing clients while creating growth
opportunities for the combined group and strengthening Wood's commercial
position.

For Wood's employees, the combination would offer opportunities across a
global network of brands. Sidara fully recognises the value of Wood's talent
and if an Offer is made which completes, Sidara intends to support Wood in
taking actions to retain and support employees to ensure business continuity.
This includes a commitment to uphold Wood's pension obligations, ensuring
schemes are funded in line with governing documents and statutory
requirements.

Together, Sidara and Wood would build a stronger, more resilient company, well
positioned to continue delivering for clients, creating opportunities for
employees and holding a world-leading position in the global energy and
materials markets.

Background on Sidara

Sidara was founded in 1956 and has expanded over the last 69 years to become a
privately-owned global partnership with 21,500 specialists, operating across
350 offices in 69 countries advising and supporting some of the world's
biggest and most complex design and engineering projects. The group includes
architects, engineers, consultants, designers and project managers. Today's
group of companies rebranded as Sidara in 2023; some of the industry's most
recognizable brands are proud members of the Sidara Group, including Dar,
Perkins & Will and TYLin. Sidara is 100% owned by the working partners of
the business.

Wood Board would be minded to recommend

Both before and in parallel to the discussions with Sidara, the Board of Wood
has continued to assess holistically all potential refinancing options. In
considering the different potential refinancing options available, the Board
is seeking to ensure that the Company has an appropriate long-term capital
structure for the benefit of the Company, its shareholders and its wider
stakeholders.  The Board of Wood believes that the Company needs to have a
more sustainable capital structure, and this requires substantial new capital
in order to diversify Wood's financing sources and reduce its indebtedness
over time.  Sources of new capital could include a substantial issue of new
equity, significant disposals or a combination of both.

Work continues on a range of alternative refinancing options. However, having
carefully considered the viability of these options together with its
financial advisers, the Board of Wood currently believes that the Possible
Offer represents the better option for Wood's shareholders, creditors and
other stakeholders.  Accordingly, the Board of Wood has indicated to Sidara
that, should an Offer be made on the terms set out above, it would be minded
to recommend the Offer to Wood's shareholders, subject to agreement of the
full terms and conditions of the Offer.

Debt modification and Sidara investment

On 14 February 2025, Wood announced in its trading update for the year ended
31 December 2024 that, given the majority of its debt facilities mature in
October 2026, it was undertaking a detailed and holistic assessment of all
potential refinancing options and engaging with its lenders on those
options.  That assessment and engagement is ongoing.  As announced on 31
March 2025, Wood has obtained temporary retrospective waivers under its
committed debt facilities for historical non-compliance with prior period
financial covenants.  The waivers are effective until 30 April 2025. The
Company is in further discussions with its lenders and noteholders to extend
these waivers and to put in place appropriate waivers in respect of the
anticipated delay to the delivery of the FY24 accounts.

The Debt Modifications are a pre-condition to any Offer and completion of the
Offer will be conditional on such modifications not having been terminated.

In order to support Wood in obtaining the Debt Modifications, Sidara intends
(following announcement of any Offer) to provide a total of $450 million in
new capital to Wood through one or more new committed debt instruments with a
maturity co-terminus with the date to which the Wood RCF is extended (the
"Sidara Liquidity Arrangements").

The Sidara Liquidity Arrangements would be structured to enable the Company to
draw in two tranches:

(a)  an initial tranche of $250 million, the drawing of which would be
conditional upon approval by Wood's shareholders of the Offer (if such Offer
were structured as a scheme of arrangement as is currently intended between
the parties) or upon the expiry of 21 days after posting of the offer document
(if such Offer were structured as a takeover offer); and

(b)  a further tranche of $200 million, the availability of which would be
conditional upon completion of the Offer.

Among other things, in the event that the Wood Board withdraws its
recommendation of the Offer, any funding drawn down under the Sidara Liquidity
Arrangements would become immediately repayable (unless in the context of a
competing bid that is matched or improved upon by Sidara).

If the Offer does not complete as a result of any antitrust or regulatory
approval not being obtained, the initial tranche of $250 million under the
Sidara Liquidity Arrangements would not be affected and would remain in place
until its maturity date (in these circumstances Wood would not be entitled to
draw down on the second tranche of the Sidara Liquidity Arrangements).

The initial tranche of the Sidara Liquidity Arrangements would initially rank
pari passu with Wood's existing RCF and Term Loan facilities and private
placement notes through to completion of the Offer.  Upon completion of the
Offer, the initial tranche of the Sidara Liquidity Arrangements would
automatically become, and the further tranche will be, subordinated to the RCF
and Term Loan facilities and private placement notes.  The terms of the
Sidara Liquidity Arrangements are expected to be substantially similar to
Wood's existing Term Loan (including as to pricing).

The Sidara Liquidity Arrangements and the Debt Modifications each require the
agreement of Wood's lenders and noteholders.  Wood and Sidara are engaging,
and will continue to engage, with Wood's lenders and noteholders in relation
to both the Sidara Liquidity Arrangements and the Debt Modifications.

The Panel on Takeovers and Mergers (the "Panel") has consented in principle to
Wood entering into an agreement with Sidara in relation to the Sidara
Liquidity Arrangements for the purpose of Rule 21.2 of the Code, with the
detailed terms to be agreed.

No action required

The Board of Wood is continuing to work with Sidara in relation to the
pre-conditions to an Offer and to agree the full terms and conditions of the
Offer.  A further announcement will be made in due course.

In the meantime, shareholders are not required to take any action in relation
to the Possible Offer.

Code notes

Under Rule 2.6(a) of the Code, Sidara must, by not later than 5.00 p.m. on 17
April 2025, either announce a firm intention to make an offer for Wood in
accordance with Rule 2.7 of the Code or to announce that it does not intend to
make an offer, in which case the announcement will be treated as a statement
to which Rule 2.8 of the Code applies. This deadline can be further extended
with the agreement of the Board of Wood and the consent of the Panel in
accordance with Rule 2.6(c) of the Code. Wood and Sidara anticipate further
extensions to this deadline being required in order to enable the
pre-conditions to be satisfied (or waived).

There can be no certainty that an offer will be made, even if the
pre-conditions referred to above are satisfied or waived.

In accordance with Rule 2.5(a) of the Code, Sidara reserves the right to:

a)   announce an offer for Wood on less favourable terms and conditions than
those set out in this announcement:

I.    with the agreement or consent of the Board of Wood; or

II.    if a third party announces a possible offer or a firm intention to
make an offer for Wood on less favourable terms than the Possible Offer; or

III.   if Wood announces a Rule 9 waiver transaction pursuant to Appendix 1
of the Code or a reverse takeover (as defined in the Code); or

b)   reduce its offer by the amount of any dividend or other distribution or
return of capital to its shareholders that is announced, declared, made or
paid by Wood after the date of this announcement and prior to completion.

This announcement is being made with the consent of Sidara.

Inside Information

The information contained within this announcement is deemed by Wood to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 (as it forms part of domestic law by virtue of the European
Union (Withdrawal) Act 2018).  On the publication of this announcement via a
Regulatory Information Service, this inside information is now considered to
be in the public domain.

The person responsible for arranging the release of this announcement on
behalf of Wood is John Habgood, Company Secretary.

 

Enquiries

 Wood

 Simon McGough, President, Investor Relations                                 07850 978 741

 Ken Gilmartin, Chief Executive Officer

 Iain Torrens, Interim Chief Financial Officer

 Europa Partners (Joint Financial Adviser to Wood)                            020 7451 4542

 Jan Skarbek, David Fudge

 J.P. Morgan Cazenove (Joint Financial Adviser and Joint Corporate Broker to  020 3493 8000
 Wood)

 Richard Perelman, James Robinson

 Morgan Stanley (Joint Financial Adviser and Joint Corporate Broker to Wood)  020 7425 8000

 Tom Perry, Alex Smart

 Rothschild & Co (Joint Financial Adviser to Wood)                            020 7280 5000

 John Deans, Paul Duffy

 FTI Consulting (PR Adviser to Wood)                                          020 3727 1340

 Alex Le May, Nick Hasell, Ariadna Peretz

Slaughter and May is acting as legal adviser to Wood.

 

Notice related to financial advisers

Europa Partners Limited ("Europa Partners"), which is authorised and regulated
by the FCA in the United Kingdom, is acting as financial adviser exclusively
for Wood and no one else in connection with the possible offer and will not be
responsible to anyone other than Wood for providing the protections afforded
to its clients or for providing advice in connection with the possible offer.
Neither Europa Partners, nor any of its affiliates, owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Europa Partners in connection with the possible offer, this
announcement, any statement contained herein or otherwise.

J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United
Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA.
J.P. Morgan Cazenove is acting as financial adviser and corporate broker to
Wood and no one else in connection with the matters set out in this
Announcement and will not be responsible to anyone other than Wood for
providing the protections afforded to clients of J.P. Morgan Cazenove or its
affiliates, nor for providing advice in relation to any matter referred to
herein.

Morgan Stanley & Co. International plc ("Morgan Stanley") which is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the
United Kingdom is acting as financial adviser and corporate broker exclusively
for Wood and no one else in connection with the possible offer. In connection
with the possible offer, Morgan Stanley, its affiliates and their respective
directors, officers, employees and agents will not regard any other person as
their client, nor will they be responsible to any person other than Wood for
providing the protections afforded to clients of Morgan Stanley or for
providing advice in connection with the possible offer or any other matter
referred to herein.

N.M.Rothschild & Sons Limited ("Rothschild & Co"), which is authorised
and regulated by the Financial Conduct Authority in the United Kingdom, is
acting exclusively for Wood and for no one else in connection with the subject
matter of this announcement and will not be responsible to anyone other than
Wood for providing the protections afforded to its clients or for providing
advice in connection with the subject matter of this announcement.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in, and rights
to subscribe for, any relevant securities of each of (i) the offeree company
and (ii) any securities exchange offeror(s). An Opening Position Disclosure by
a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities exchange
offeror is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead make a
Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror, save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on the Takeover
Panel's website at www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether
you are required to make an Opening Position Disclosure or a Dealing
Disclosure.

Rule 26.1 disclosure

In accordance with Rule 26.1 of the Code, a copy of this announcement will be
available (subject to certain restrictions relating to persons resident in
restricted jurisdictions) at www.woodplc.com by no later than 12 noon (London
time) on the business day following the date of this announcement. The content
of the website referred to in this announcement is not incorporated into and
does not form part of this announcement.

Additional Information

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or the solicitation of an offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities, or the
solicitation of any vote or approval in any jurisdiction, pursuant to this
announcement or otherwise. Any offer, if made, will be made solely by certain
offer documentation which will contain the full terms and conditions of any
offer, including details of how it may be accepted.

The distribution of this announcement in jurisdictions other than the United
Kingdom and the availability of any offer to shareholders of Wood who are not
resident in the United Kingdom may be affected by the laws of relevant
jurisdictions. Therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom or shareholders of Wood who are not
resident in the United Kingdom will need to inform themselves about, and
observe any applicable requirements. Any failure to comply with the
restrictions may constitute a violation of the securities law of any such
jurisdiction.

 

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