Aberdeen's Wood set to 'engage' with suitor Apollo Management over potential £1.7bn takeover

Energy and engineering services group Wood, which is headquartered in Aberdeen, has decided to "engage" with its US private equity suitor to firm up an offer after a £1.7 billion takeover approach.

Wood's stock jumped following the decision to finally warm up towards Apollo Management's advances, having previously rejected four proposals from the firm. The Scottish group said specifically that it was now looking to see if a firm offer can be made on the same financial terms as the fifth proposal put forward earlier this month for 240p a share in cash, valuing the company at around £1.66bn.

Wood said: "Having now weighed all relevant factors, particularly feedback received from Wood shareholders, the board has decided to engage with Apollo to see if a firm offer can be made on the same financial terms as the final proposal. Accordingly, the board will grant Apollo access to due diligence materials."

Apollo now has to announce a firm intention to make an offer for Wood by May 17 after an extension was granted by the City's Takeover Panel to the original April 19 deadline.

Wood chief executive Ken Gilmartin has been leading a strategy overhaul after being appointed to the role last year. Picture: contributed.

Apollo's fifth and final proposal represents a 17 per cent premium to Wood's closing share price on April 3, the day before Apollo made the latest approach, and a 59 per cent premium and 20 per cent increase on the first approach.

Wood revealed in February that it had rejected three unsolicited approaches from Apollo, saying at the time that it believed each "significantly undervalued the repositioned group's prospects".

The Aberdonian group has around 35,000 staff, largely specialising in engineering and consultancy for the energy, minerals, chemicals and life sciences sectors. It offloaded its environmental consulting division last year in a move to reduce its debt by more than $1bn (£805 million).

The company last summer announced a new chief executive – Ken Gilmartin – who has been leading a strategy overhaul at the firm. In January, it said it had entered the new year with “positive momentum” after building up a solid order book and reporting strong underlying revenue growth.

It has been left with a hefty debt pile since taking over rival Amec Foster Wheeler for £2.2bn in 2017, which also saw it face legacy lawsuits, including a $115m settlement made last year for a damages claim filed in 2016.