Investor piles pressure on John Wood Group over sale options
Aberdeen energy services firm urged to mull bids amid share price woes.
A major shareholder of John Wood Group (LSE: WG) is turning up the heat on the engineering consultancy to actively explore a potential sale.
Sparta Capital Management, a top-ten investor, has fired off a letter to Wood Group's Chair expressing discontent over the company's lacklustre share price performance.
The investor is pushing Wood Group's leadership to engage potential suitors if they deem a sale would unlock maximum value for shareholders. This follows the collapse of a £1.7 billion takeover pursuit by Apollo Management last year.
Despite rebuffing Apollo's sweetened 240p per share bid in April, a 59% premium at the time, Wood Group's shares have continued their downward slide, closing at 140.40p on Monday, nearly 40% off last year's levels.
Wood Group recently reported a 7.9% revenue uptick to $5.90 billion for 2023 alongside a narrowed pretax loss of $62.7 million. Though unveiling a cost-cutting "simplification" drive and rosier outlook, the firm appears to have failed in placating Sparta's concerns.
While lauding Wood Group's operational strides over 18 months, Sparta's missive suggests the UK markets have been unwilling to appreciate the firm's efforts, necessitating it to seek alternative routes – an apparent nod towards a sale.
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