British oilfield services and engineering firm John Wood Group rejected a potential 1.42 billion pound ($1.77 billion) buyout proposal from Dubai-based firm Sidara on Wednesday, saying it “undervalued Wood and its future prospects”.
The cash offer of 205 pence per share, made on April 30, represented a premium of 35.5% to Wood’s closing price before the offer.
A Bloomberg report on Sidara weighing a bid had sent shares of FTSE 250-listed Wood up as much as 26% earlier in the day. They were up 12.6% to more than a one-year high of 185.97 pence by 1220 GMT.
This is not the first time that the Scotland-based firm has rejected a buyout offer. Last year, U.S.-based Apollo Global Management abandoned a 240 pence per share bid for Wood after multiple offers were rejected.
Wood, which provides consultation, management of assets and engineering services for the energy and materials sector, operates in more than 60 countries. It has sharpened its focus on its sustainable business, which involves providing solutions for decarbonisation, energy transition, and materials for net-zero strategies.
Founded in 1956 as Dar Al-Handasah, Sidara as it is now known, is a family-owned engineering and consulting firm with a presence in more than 60 countries, according to its website. The company, which has until June 5 to make a firm offer, said in a statement that it was “considering next steps”.
Sidara’s proposal follows activist shareholder Sparta Capital Management’s letter to Wood last month, pushing it to consider either selling itself or to reconsider its UK listing.
According to the letter, Wood’s share price performance has not matched that of U.S.-listed engineering peers Jacobs Solutions and KBR, said the hedge fund, which urged a strategic review to maximise shareholder value.
Wood’s share price is down by a third in the last 12 months, with the company’s market capitalisation standing at 1.14 billion pounds ($1.42 billion).
The number of failed takeovers of UK-listed companies has more than doubled in recent years as boards have rebuffed a slew of bids they believe are taking advantage of cheapened stock prices. Britain’s Currys and Direct Line are two recent examples of companies that have rejected offers because their boards said they were too low.