Sparta Capital urges Wood Group to seek sale, rethink UK listing (updated)

Sparta Capital

16/04/2024 12:47

(Updates share price in paragraph 2, adds detail on recent
earnings in paragraphs 11-12)
    By Nell Mackenzie
       LONDON, April 16 (Reuters) - Activist shareholder Sparta
Capital Management is pushing British engineering services firm
Wood Group  WG.L  to consider either selling itself or to
reconsider its UK listing, according to a letter from the fund
manager on Tuesday.     
    Shares in the FTSE 250  .FTMC  company were last up 0.5% at
1217 GMT at about 141 pence, the highest level since March 26.
    A representative for the hedge fund declined to comment on
the letter and also declined to confirm how much stock Sparta
Capital held in Wood Group.  Wood Group also declined to
comment.
    Wood Group's share price performance has not matched that of
U.S.-listed engineering peers Jacobs Solutions  J.N  and KBR
 KBR.N , the hedge fund said in its letter to the company,
published on Tuesday. 
    In the last 12 months, Wood Group's shares have lost some
37% in value, compared with a 8.6% gain for KBR shares and a
rise of 24% in Jacobs Solutions. 
    "UK mid-caps have chronically underperformed global equities
in recent years," Sparta Capital said. 
    Wood Group's future, "could be best supported by different
owners, and we urge you to undertake a strategic review and
explore the best way to maximise shareholder value, including a
sale of the company," the letter said. 
    Last year, U.S.-based Apollo Global Management  APO.N 
abandoned a $2.1 billion takeover of Wood Group after multiple
attempts without citing any reasons. 
    Wood Group's share price now trades at a discount to that
offer, the letter noted. The company's market capitalisation was
$1.21 billion at Monday's close, while Apollo's bid had valued
it at $2.1 billion.
    Sparta Capital is a multi-strategy investment fund launched
in 2021 by ex-Elliott Management investor Franck Tuil, and is
based in London.
    Wood Group planned to cut "hundreds" of jobs nearly a year
after the collapse of takeover talks, according to a Sky News
report on March 20. 
    The company reported full year results on March 26 that made
no specific reference to job cuts. On a call with analysts,
chief executive Ken Gilmartin said the company was "continuing
to hire".

 (Reporting by Nell Mackenzie; editing by Amanda Cooper, Kirsten
Donovan)
 ((Nell.Mackenzie@thomsonreuters.com; https://twitter.com/nellmooney;))