Sidara (Dar) offloads $1.4bn stake in Worley; Goldman Sachs, Citi involved

Goldman Sachs bankers were busy on Monday night working with Citi to sell a massive $1.4bn holding in Worley. Picture: Justin Lane, EPA

The Australian equities market appeared to be back in full force on Monday night after investment banks Goldman Sachs and Citi launched what could be the largest block trade of this year.

Offloading a $1.4bn interest in engineering firm Worley is its largest shareholder and former suitor Dar, which tried to buy the business around 2016 and which changed its name in December to Sidara.

Sources say its move to stage an exit was driven by the strong rally in the stock fuelled by the higher oil price and a broader partnership that had not eventuated.

The trade has been in the works by the investment banks and adviser Rothschild for at least a fortnight and the market had been bracing for a major equities transaction of some sort this week.

On offer was a 19 per cent interest of the $8.5bn company worth $1.4bn.

Shares were being auctioned off at a range of $14.25 to $15 in 5c increments with the book set to shut at 7.30pm AEST.

The price range represents an 8 per cent to 12.6 per cent discount to Worley’s last closing pricing of $16.31 on April 29.

The book was covered at the floor price by 6.30pm (AEST).

A term sheet sent to investors said that Samurai Investments, a wholly owned subsidiary of Dar Al-Handasar, was offloading the interest.

The Middle Eastern group bought into Worley with an initial 15 per cent stake in 2017 after making a takeover bid in 2016 as part of an attempt to buy the business and amass 19.9 per cent.

Shares were purchased at that time in 2017 at $10.35 after Worley’s shares closed at $8.07.

Its offer was rebuffed.

Its holding reached 26 per cent, but it was diluted after the company purchased the Energy, Chemicals and Resources division of Jacobs Engineering in a $4.6bn deal in 2019.

It then took up all of its rights as part of a raise for the deal equalling about $660m and was last at 23.5 per cent according to Bloomberg data.

Worley’s rally has come after it shook off allegations of a $700m corruption scandal that surfaced late last year in Ecuador, causing a $58m hit to earnings in December.

It was found by an international arbitration tribunal that it engaged in illegal and corrupt behaviour after claims that it bribed government officials with luxury trips in a bid to win work.

Before that time it had suffered project downgrades and challenging nuclear power contracts in Eastern Europe.

But led by Chris Ashton, Worley reported a 22 per cent lift in revenue for the six months to December to $5.6bn, as its underlying net profit before tax and amortisation was up 30 per cent to $188m on the previous corresponding period.

Sidara describes itself as a global design, engineering and consulting group that supports some of the world’s biggest and most complex design and engineering projects with $US2.8bn of revenue generated last year.