Shares in Aberdeen’s biggest company Wood were ahead by 7p at 207p shortly after opening this morning.
However, this price is still significantly under yesterday’s fifth takeover proposal at 240p a share from US private-equity firm Apollo Global Management.
Market watchers say this gap indicates that investors do not expect a deal for the leading engineering and consultancy business to go through.
Apollo said on Tuesday that the latest bid would provide a "compelling opportunity" for Wood’s shareholders to monetise their holdings for cash at a highly-attractive valuation.
It added: “Apollo looks forward to engaging constructively with the board of Wood to finalise the terms of a recommended transaction to be put forward to Wood’s shareholders.”
It is the first time the US private-equity firm has spoken publicly about the takeover bids, made “on behalf of certain investment funds managed by it”.
Announcement noted
Wood responded later that its board noted the Apollo announcement.
The company said it would continue to engage with its shareholders.
Wood added: “There can be no certainty that an offer will be made. Further announcements will be made as appropriate.”
Apollo’s interest in the north-east company has fuelled fears that cheaply-valued UK businesses are vulnerable to foreign takeovers this year, as cash-rich private-equity firms and corporates take advantage of suppressed prices in London.
At the end of 2016, Wood shares were priced at more than 800p each, but are way off that level now.
They were down to just over 150p three years ago and fell further to near the 100p mark last October, though they have recovered a bit since then.
Targeted
Wood is the latest UK company to be targeted by private equity.
The Granite City business has a worldwide workforce of around 37,000, with more than 6,000 of them in the UK.
The Aberdeen team currently totals 4,500.
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.
Energy services are responsible for two-thirds of its business, while materials make up the other third.
Wide-ranging sector
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.
Wood chief executive Ken Gilmartin said last week that the group was looking to the future with confidence as a much-stronger operation.
The company had just reported revenues for 2022 of £4.418billion – a year-on-year rise of 8.3% at constant currency.
Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) were marginally ahead at £312million at constant currency, while the order book is now nearly £5billion.
Mr Gilmartin said: “We are pleased to have delivered results in line with expectations for 2022, including a return to revenue growth - with 8% growth at constant currency.
“This was achieved in a year of major change for the group, under new leadership, as we addressed legacy issues, transformed our balance sheet and launched a new strategy.
Strategy
"Our strategy is already delivering. We started 2023 with good momentum - our order book for delivery in 2023 is up 10%, headcount is up 8% and financial guidance for 2023 is in line with our medium-term financial targets of adjusted EBITDA growth at mid-to-high single-digit compound annual growth rate - with momentum building as our strategy delivers.
“We now look to the future with confidence as a much stronger company."