OIL INDUSTRY services firm Wood Group said yesterday its chief executive Allister Langlands will step up to the chairman’s role and Bob Keiller, currently in charge of the part of the business that maintains oil pipelines, will replace him.
The sweeping shake-up at the top of the company also sees Ian Wood, who has been chairman for 30 years, retiring. The UK corporate governance code frowns upon the practice of chief executives stepping into chairman jobs, as the move can make it hard for new chief executives to challenge their predecessors’ decisions.
FTSE 250 company Wood Group yesterday acknowledged Langlands’ move to the chairman’s position was not usual practice, but said it had consulted with shareholders owning more than 40 per cent of the company, and they supported the board changes.
New chief executive Keiller is currently head of the Wood Group PSN division, a business that maintains and services the production facilities of oil companies such as Shell and Talisman, and is Wood Group’s biggest division on a revenue-basis.
The management changes will take effect from 1 November, Wood Group said.
Ian Wood, who owns a 5.7 per cent stake in the company which was founded by his grandfather to repair ships in the early twentieth century, was chief executive of the group between 1967 and 2006.
Analyst James Evans at Canaccord Genuity said: “Wood Group has in the past been seen as a takeover target, in part due to its mid-cap status but particularly due to the attractiveness of some of its businesses. With Sir Ian Wood stepping away from the company and limited family involvement remaining, we think that there could be renewed speculation about Wood Group being targeted.”
Oriel Securities said takeover activity was one possibility, but warned the moves may also lead to further share sales by the family. “Whilst it may open up potential for M&A activity or bids for the company, it also potentially raises the possibility that the Wood family may try to place shares in the near future,” it said in a note.
City A.M. Reporter