Openai/6952b500-851c-8011-9361-2f64632b350b

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User: Why is wood group trading so far below offer price

Why is wood group trading so far below offer price

Assistant: There are several concrete reasons why Wood Group’s John Wood Group PLC share price is trading so far below the offer p…

There are several concrete reasons why Wood Group’s (John Wood Group PLC) share price is trading so far below the offer price, and why the market isn’t marking the stock up to the takeover level (e.g., 30p offer) until the deal is completed:

Wood Group has been facing major financial headwinds:

• Significant revenue declines and lower profitability in recent periods. Investing.com
• Large free cash flow outflows and high net debt levels. Investegate
• A substantial pre-tax loss in the latest accounts (e.g., reported impairments). ADVFN

Investors typically price in financial weakness, especially when there’s risk of further dilution, debt refinancing issues or restructuring.

A takeover bid price may act as a ceiling for where the share trades in the market — but the stock will often trade noticeably below that until:

• The bidder makes a firm offer under the Takeover Code,
• All conditions are met (regulatory, financing, audited accounts), and
• **Shareholders accept the bid.

Until then, the price reflects: ✔ the risk the offer could be lowered ✔ the possibility it might be withdrawn ✔ the risk of other financing outcomes ✔ discount for company risk and market conditions

Wood Group shares are trading well below the offer price primarily due to:

• Takeover uncertainty and conditionality
• Poor recent financial performance and debt concerns
• Accounting problems and market suspension
• Investor risk discount and illiquidity

If the takeover becomes unconditional and final, the stock will usually gravitate closer to the offer price — but until then, the market prices in the risk that things might not go through at that price or at all.

If you want, I can go into how likely it is the takeover will complete and what happens to your shares in different scenarios.

User: Yes

Yes

Assistant: Here’s a clear breakdown of how likely the Wood Group takeover at 30 p per share is to complete, what still needs to ha…

Here’s a clear breakdown of how likely the Wood Group takeover at ~30 p per share is to complete, what still needs to happen, and what the share price discount reflects.

🧠 Current Takeover Situation

📌 Sidara’s offer Sidara (via Bidco) offered to buy John Wood Group PLC for 30 p per share in cash, recommended by Wood’s board and approved by shareholders. Investing.com India

📌 Completion expected The companies still expect the deal to complete in the first half of 2026 — but completion is not guaranteed until final legal, regulatory and financing conditions are met. Investing.com

✅ What Has Already Happened

✔️ Shareholder approval

Shareholders voted overwhelmingly in favour of the scheme of arrangement and the special resolutions needed to implement the takeover. Investing.com India

✔️ Funding and refinancing progress

Key internal financing hurdles have been satisfied:

• Interim funding put in place
• Debt facilities extended to 2028
• Some “Exceptional Conditions” already met. Investing.com

This strengthens the chances the deal will go through because it shows Sidara and Wood have resolved some big financial risks.

❗ What Still Needs to Happen Before Completion

Even with shareholder approval, several conditions remain outstanding:

🔹 Regulatory and antitrust approvals

Authorities must clear the transaction — this can take time and isn’t fully under Wood’s or Sidara’s control. Wood

🔹 Court sanction (scheme approval)

Since this is being done via a court-sanctioned scheme of arrangement, a court must formally approve it. Wood

🔹 No material debt acceleration

One of the Exceptional Conditions is that none of Wood’s amended debt facilities are terminated or accelerated in a way that violates the terms — this is still outstanding and could derail the deal if triggered. Wood

🔹 Other legal and documentary requirements

Certain legal steps and paperwork must still be completed — until these are done, the offer isn’t legally binding. Wood

📉 Why the Share Price Still Trades Below 30p

Even though 30p is the offer price, the market discounts the share price below that level because of remaining uncertainty:

1. Completion risk

Shares do not automatically trade at the offer price until the deal is unconditional — and right now it’s still conditional on several things that could fail. Wood

2. Regulatory unknowns

Antitrust and court approvals aren’t guaranteed and can be slow — markets price in the risk they may be delayed or refused. Wood

3. Company history & risk premium

Wood had accounting issues, liquidity pressures, and a long suspension of trading earlier in 2025 — investors demand a discount for these risks. Investing.com

4. Exceptional Conditions

Because some critical conditions can’t be waived and would automatically cancel the deal if unmet, the market treats them as real risk factors. Wood

📅 Timeline & Probabilities

Here’s how the likely sequence looks:

| Step | Expected Timing | Status | | ------------------------------------------ | ------------------ | --------------------------- | | Regulatory and antitrust decisions | Early–mid 2026 | Ongoing | | Court sanction of scheme | Before completion | Pending | | Deal completion / scheme becomes effective | H1 2026 (expected) | On track but not guaranteed |

Probability view (market implied): Because the share trades below 30p, the market is effectively saying there is meaningful risk the deal might be delayed, renegotiated, or even fail — so it’s pricing in a risk discount.

📌 Bottom Line

✅ Deal likelihood: Still good — significant progress has been made, and shareholders have approved it. ⚠️ Deal isn’t guaranteed: Some hard conditions still need satisfying (regulatory, court sanction, no debt acceleration). 📉 Shares trade below offer price: Because the market is discounting the uncertainty left before formal completion.

If you’d like, I can explain what happens to your shares (and your options) in different scenarios — for example, if the deal completes as planned, if it’s delayed, or if it collapses.