Marathon's Stake Spotlights John Wood Group's Drastic Takeover Endgame

LONDON, UK – December 03, 2025

A routine regulatory filing has cast a fresh spotlight on the dramatic final act of John Wood Group plc, the beleaguered Scottish engineering giant. On Tuesday, Marathon Asset Management disclosed a 3.68% stake in the company, a mandatory revelation under the UK's Takeover Code. While such filings are common during M&A activity, this one arrives not amidst a bidding war, but in the quiet aftermath of a shareholder surrender, offering a glimpse into investor positioning as the firm awaits its acquisition by Dubai-based Sidara Limited.

The filing itself is straightforward: Marathon holds just under 25.5 million shares. It also details a minor sale of 6,474 shares on December 2nd. But for a company that just two years ago rejected a £1.66 billion takeover offer, the context surrounding this disclosure reveals a stark tale of financial distress, governance failures, and the harsh realities of the bottom line.

A Drastic Revaluation

The journey of John Wood Group over the past two years serves as a cautionary tale in corporate strategy. In May 2023, the company's board confidently rebuffed a final 240 pence-per-share offer from US private equity firm Apollo Global Management, arguing it "significantly undervalued" the group's prospects. Fast forward to August 2025, and the same board recommended an all-cash acquisition from Sidara for a mere 30 pence per share—a staggering 87.5% discount from Apollo's bid, valuing the company at just £216 million.

Shareholders, facing a grim alternative, overwhelmingly approved the deal in November. The board's justification painted a picture of a company on the brink. In its recommendation, it admitted that John Wood Group's capital structure was "unsustainable" and that it had exhausted all viable options for refinancing its colossal $1.6 billion debt load. The company has not generated sustainable free cash flow since 2017, burning through approximately $1.5 billion in the subsequent seven years.

Compounding these woes, the firm reported a pretax loss from continuing operations of £2.76 billion for the 2024 financial year, a massive increase from the prior year's £151.9 million loss. The situation became so dire that the company's shares were suspended in April 2025 following delays in publishing its annual results. Further eroding confidence, the UK's Financial Conduct Authority (FCA) launched an investigation in June 2025 into the company's market disclosures, following an independent review that uncovered "material weaknesses and failures in the Group's financial culture," including issues with accounting, governance, and information provided to auditors. Faced with this reality, the Sidara offer was no longer an undervaluation; it was a lifeline.

Reading the Tea Leaves of a Regulatory Filing

It is within this turbulent context that Marathon Asset Management's Form 8.3 disclosure must be analyzed. As a significant institutional investor, Marathon's position is noteworthy. The filing, mandated because Sidara's offer makes John Wood Group subject to the Takeover Code, provides transparency into the holdings of major shareholders.

The most intriguing detail is the small sale of 6,474 shares at a price of £0.24080 per unit. This transaction occurred nearly three weeks after shareholders had already approved the 30 pence-per-share takeover. Selling at a near 20% discount to an agreed-upon price might initially seem like a bearish signal. However, the size of the sale—a mere 0.025% of Marathon's total stake—renders it strategically insignificant.

Market analysts suggest this is likely not a change in sentiment but rather routine portfolio management. "An institution of that size might be trimming a fractional position for liquidity, rebalancing, or even minor tax-loss harvesting," noted one London-based market strategist. "It’s administrative noise, not a strategic signal." The discount to the offer price simply reflects the market's pricing of residual risk—the small but non-zero chance of regulatory hurdles—and the time value of money, as the deal's completion is not expected until the first half of 2026. Marathon, like other shareholders, is now largely a passenger, waiting for the acquisition to formally close.

The Limits of Influence: A Lesson in Voting Rights

The filing also contains a crucial nuance that speaks directly to the mechanics of institutional power. Marathon discloses that it lacks voting discretion over 3,314,240 of its shares, representing about 13% of its total holding. This detail is a vital component of the Takeover Code's transparency mandate. It clarifies that an investor's economic interest does not always translate directly into voting power.

These non-discretionary shares are likely held on behalf of clients who retain their own voting rights. For Marathon, it means that while it controls a 3.68% economic stake, its ability to directly influence a shareholder vote, such as the one held in November, was limited to the shares over which it has explicit control. This distinction is critical in hotly contested takeover battles, preventing the market from miscalculating the influence of a major fund. In the case of John Wood Group, with the shareholder vote already passed, this detail now serves as a textbook example of the complex relationship between ownership and control in modern capital markets.

A New Chapter Under Sidara

With the shareholder drama effectively over, the focus shifts to John Wood Group's future under new ownership. The Sidara acquisition is positioned as a "holistic solution" that provides more than just an exit for shareholders; it offers a path to survival for the business itself.

Sidara has committed to a $450 million capital injection, including $250 million in interim funding to stabilize the company immediately and another $200 million upon the deal's completion. This infusion is critical to restructuring the balance sheet and funding future operations. Lenders have also agreed to extend debt facilities to October 2028, providing crucial breathing room.

The strategic vision is for John Wood Group to become Sidara's energy and materials division, retaining its brand and operational autonomy while leveraging Sidara's global scale and long-term investment horizon. The appointment of a new Group CFO, Jade Moore, on December 1st—a leader noted for her experience in complex transformations and M&A—signals a clear intent to steer the ship through this difficult transition. For the thousands of employees at John Wood Group, this takeover, despite its painful valuation, represents the best chance for stability and a renewed focus on its core engineering and consulting business in the energy and materials markets.