Wood Group rises 3% as it looks to sell $1bn business

John Wood, the energy services group which is currently buying rival PSN in a deal worth $955m, has risen 3% after it confirmed reports it was considering a sale of its well support business.

Analysts said the company could get at least $1bn for the business, which would reduce the risk of the company making a cash call on shareholders. A number of US companies were tipped as possible bidders, including GE, Halliburton, Weatherford, FMC and Cameron. Evolution Securities said:

The [well support] business contains the largely North American pressure control and logging services, both of which are booming at present – but the jewel in the crown would be the ESP pump business where they are global number three. The timing of a disposal in the current cycle would be good and the proceeds would eliminate the debt incurred in the PSN acquisition – removing the need for a potential rights issue – a risk we highlighted in our January sector report.

Could this be a first move which ultimately could see Wood Group PSN disposing of its engineering business to Amec?

Wood's shares are currently 18.5p higher at 596p, helping the FTSE 250 outperform the falling FTSE 100.