Petrofac Limited (LSE:PFC) shares moved higher after it emerged that private equity offers had been made for sector peer Wood Group (John) PLC (LSE:WG.).
Analysts said the news of the offers would increase interest in the wider energy services sector, with Wood shares having shot up from below 150p to 200p after the company confirmed it had rejected approaches from Apollo Global Management (NYSE:APO).
Three unsolicited, preliminary and conditional approaches have been made by Apollo to Wood, the last at 230p in late 26 January.
But Wood’s board said it considered each with its advisors and rejected them, concluding they significantly undervalued the group’s prospects.
Apollo has until 22 March to announce whether to make another offer or that it does not intend to.
Wood, after selling its built environment arm, has cut net debt to around US$350-400mln.
Broker Peel Hunt noted that Wood has lower growth and margins than peers and traded on lower multiples, while its shares at 230p trade for around 6.6 times earnings on an EV/EBITDA basis for 2023 and 5.6 for 2024.
Aussie rival Worley trades for above 11/10.0 times, the analysts added.
"This may provide a positive read across for Petrofac, increasing interest in the sector," they said.