Aberdeen-based oil and gas engineering giant Wood Group is close to opening talks for a £1.66billion takeover by US private equity group Apollo, according to weekend reports.
Wood has rejected four proposals from Apollo but is said to be warming to a fifth and final proposal made this month.
Having refused to engage with the bidder, it has, in recent days, 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.
The correspondence is seen as a prelude to opening full negotiations. Those close to the process told the newspaper that it indicates the offer was 'getting close to being acceptable for Wood’s board'.
Clock ticking
Takeover panel rules mean Apollo must make a formal offer or walk away by the close of play on Wednesday this week.
Wood’s management and advisers are understood to have spent recent days discussing the bid with shareholders.
Barring a failure to satisfy Wood’s preliminary questions, Apollo can request an extension on the deadline while the two sides negotiate.
Apollo’s first offer was at 200p a share, while its final one was 240p.
Multinational
Wood employs 36,000 people, primarily in engineering and consultancy for the energy, minerals, chemicals and life sciences sectors.
The business has come a long way since Sir Ian Wood saw the huge opportunity presented by the birth of the UK offshore oil industry in the 1970s.
The inspirational entrepreneur transformed the family-owned fishing operation into a multinational oil services company listed on the London Stock Exchange.
Now led by CEO Ken Gilmartin (pictured), Wood has an annual turnover of more than £4billion, and the order book for this year currently stands at nearly £5billion.
Energy services are responsible for two-thirds of its business, while materials make up the other third.
Materials is a wide-ranging sector which takes in everything from designing facilities for pharmaceutical companies to delivering projects in the transportation and water sectors.