Aberdeen-headquartered Wood Group is nearing a takeover from a Middle Eastern rival.
Wood said it has now "decided to engage" with Dar Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara") following a fourth and final bid.
The "takeover panel" has also agreed to an extension to the deadline in which Sidara must make a firm offer or walk away, now 5PM on July 3, 2024. This can be further extended by the board of Wood.
The near-£1.6bn approach equates to around 230p per share, up from the previous bid of 220p per share.
Wood said Sidara's opening two bids (205p per share and 212p per share, respectively) "fundamentally undervalued" Wood Group, according to its board.
Discussions to begin
In a update to the markets on Wednesday afternoon, Wood said: "The Board remains confident in Wood's strategic direction and its fundamental prospects.
"However, having now weighed all relevant factors including, in particular, feedback received from Wood shareholders, the Board has decided to engage with Sidara to determine if a firm offer can be made on the same financial terms as the Final Proposal.
"Accordingly, the Board will grant Sidara access to due diligence materials."
It added: "There can be no certainty that an offer will be made. Further announcements will be made as appropriate."
Who is Sidara?
The Lebanese-founded design and engineering business rebranded to its new name last year.
It's reported that it sold down a $1.4bn (£1.12bn) stake in Australian engineering services group Worley in April, to prepare to approach Wood.
The company, founded in 1956, generates about half of its $2.3bn (£1.84bn) revenue in the US and was believed to have been interested in Wood as a channel to grow that further through new oil and gas projects and renewable energy.
Around a quarter of Wood's revenue last year was accounted for in the US.