Marathon's Curious Sale: A Signal in John Wood Group's Takeover Saga?

LONDON, UK – December 01, 2025

A seemingly routine regulatory filing has cast a spotlight on the delicate final act of John Wood Group plc’s troubled takeover. A disclosure from Marathon Asset Management, a significant shareholder, reveals a puzzling stock sale executed just days after the company’s acquisition by UAE-based Sidara was overwhelmingly approved. While the transaction itself is minor, the price at which it was conducted offers a telling glimpse into the risk calculations of institutional investors navigating one of the year’s most complex corporate rescues.

On November 28, the London-based asset manager sold 408,374 shares in the Scottish engineering giant at a price of 24.52 pence per share. This figure stands in stark contrast to the 30 pence per share cash offer from Sidara that shareholders, including Marathon, had greenlit only ten days prior. The move by a sophisticated investor to willingly accept a nearly 18% discount to an agreed-upon price raises a critical question for the market: is this simply portfolio housekeeping, or is it a subtle signal about the perceived risks that still linger around John Wood Group's future?

A Lifeline Amidst Turmoil

To understand the significance of Marathon’s transaction, one must appreciate the precarious position John Wood Group occupied for much of 2025. The Sidara takeover is less a celebratory merger and more a desperately needed lifeline. The company has been besieged by challenges, culminating in the suspension of its shares from the London Stock Exchange in May after it failed to publish its 2024 audited accounts on time.

When those accounts finally emerged, they painted a grim picture. The company disclosed "material weaknesses" in its financial reporting, a confession that triggered a probe by the Financial Conduct Authority. The bottom line was even more alarming: a staggering pre-tax loss from continuing operations of $2.76 billion for 2024, driven primarily by massive impairments of goodwill.

Against this backdrop, Sidara’s interest evolved into a protracted negotiation. The initial offer was higher, but the discovery of Wood's financial frailties led to a revised, and final, offer of 30 pence per share. Crucially, the deal includes a vital $450 million capital injection, with the first $200 million becoming accessible upon shareholder approval. The board’s recommendation was unequivocal, stating that alternative paths would likely generate "materially less, and potentially zero, value for shareholders." This stark assessment underscored the existential nature of the crisis and positioned the Sidara deal as the only viable path to survival.

Decoding the Discount Sale

The decision by Marathon to offload a portion of its stake below the rescue price is the central puzzle. While the sale represents less than 2% of Marathon’s total holding, its pricing is what demands analysis. Why leave money on the table when a higher, board-approved price is on the horizon?

One interpretation points to pragmatic risk mitigation. Despite shareholder approval, takeovers are not complete until the ink is dry and the funds are transferred. Given John Wood Group’s recent history of accounting surprises and regulatory entanglements, some investors may harbor concerns about so-called "tail-end risk"—the small but non-zero possibility of a last-minute complication derailing the transaction. For a fund manager, locking in a slightly lower but certain gain on a small part of a position can be a prudent hedge against unforeseen events. It’s a classic case of a bird in the hand being worth two in the bush, especially when the bush has recently been on fire.

Alternatively, the sale could be driven by internal fund mechanics that are entirely divorced from sentiment about the takeover. Portfolio managers often face liquidity requirements or rebalancing mandates at the end of a month or quarter. The transaction could simply be a routine adjustment, with the timing being coincidental. However, the substantial discount accepted makes this a less satisfying explanation on its own.

Ultimately, Marathon’s action is one of nuance. The firm retains a substantial position of over 25 million shares, a 3.68% stake that signals continued belief that the acquisition will complete at the 30 pence price. The small sale, therefore, isn't a vote of no-confidence but rather a calculated, tactical de-risking maneuver. It reflects a clear-eyed acknowledgment of John Wood Group’s troubled past, even as it bets on its future salvation.

The Nuances of Shareholder Power

The Form 8.3 disclosure also contained another detail that is critical for understanding the landscape of modern corporate governance: Marathon lacks discretionary voting rights over 3,314,240 of its shares. This footnote is a powerful reminder that an asset manager’s headline stake does not always equate to monolithic voting power. In this case, for about 13% of its holding, Marathon acts as a steward, casting votes according to the instructions of its underlying clients, the ultimate beneficial owners.

While this distinction was not decisive in the John Wood Group vote, which passed with overwhelming support, it highlights a crucial complexity in M&A battles. In a more closely contested shareholder vote, the alignment of such non-discretionary shares can become a pivotal factor. It shows that institutional influence is often a distributed power, dependent on a web of client mandates and agreements. For analysts and other investors, it’s a warning against taking large reported stakes at face value without digging into the fine print of who truly controls the vote.

A New Chapter Under New Leadership

As the market digests the signals from key investors like Marathon, John Wood Group is already turning its attention to the monumental task ahead. The timing of the disclosure coincides with today's announcement of a new Chief Financial Officer, a leader whose resume is heavily weighted with experience in complex transformations and M&A integrations. This move is a clear signal from the company and its incoming owner that the focus is shifting from securing the deal to executing the turnaround.

The real work for John Wood Group begins now. The Sidara acquisition provides the capital and stability necessary for survival, but the path to sustainable profitability will be long. It will require rigorous financial discipline, operational restructuring, and the rebuilding of market trust. Marathon’s small, discounted sale serves as a final, subtle commentary on the deal's closing stages—a transaction that acknowledges the risks of the past while still holding a significant stake in the promise of the future. The bottom line is that the company has been saved from the brink, but its journey toward creating real, long-term value is only just beginning.