The privately held Dubai-based engineering group Sidara has abandoned its long-running takeover attempt of John Wood, blaming rising geopolitical risks and financial market uncertainty.
John Wood Group shares fell by 73p, or 37 per cent, to 123¾p, the lowest level since December 2022.
There are growing concerns that the war in Gaza could spread in the Middle East, a key growth area for Wood. The FTSE 250 engineering consultancy’s Middle East and Africa division contributed about 18 per cent of annual revenue last year.
A spokesman for Sidara said: “In light of rising geopolitical risks and financial market uncertainty at this time, Sidara does not intend to make a firm offer for Wood.”
Sidara had three approaches rejected in May after it was accused of undervaluing the business and its prospects before the Wood board agreed to engage on a potential 230p-a-share deal in June. Wood opened its books to its Dubai-based rival, which had until August 9 to announce a firm bid or walk away.
Last week, Wood said it had received confirmation from Sidara that the company had completed its due diligence. Sidara was thought to have been seeking opportunities to expand its presence in North America, where Wood earned about a third of its revenues in 2023.
The 230p-a-share approach from Sidara was a 52 per cent premium to Wood’s closing share price on April 29, when Sidara submitted its opening offer of 205p.
Wood said after Sidara walked away: “The board remains confident in Wood’s strategic direction and fundamental prospects next year.”
The company also reconfirmed its outlook for this year and 2025. In a trading update last month, the company forecast that adjusted earnings before interest, tax, depreciation and amortisation would be about 4 per cent higher for the first six months of 2024 at $210 million.
Last year Apollo Global Management, a private equity firm, made five approaches to Wood before the board eventually opened its books when it made a £1.7 billion indicative offer at 240p a share. However, in May last year the private equity firm decided not to pursue a deal.
Wood has come under pressure this year from an activist shareholder, Sparta Capital Management, which has pushed the company to consider either selling itself or explore listing in New York. Sparta wrote to the board in April urging it to undertake a strategic review of the company and “explore the best way to maximise shareholder value”.
Wood has its headquarters in Aberdeen. It was founded in 1982 by Ian Wood and specialised in oil services in the North Sea. The company floated on the London Stock Exchange in 2002 and has diversified. Today, it provides consultation, management and engineering services in more than 60 countries. It employs about 35,000 people in the oilfield services, renewables, chemicals, life sciences, minerals and infrastructure sectors.
Sidara was founded in 1956 as Dar al-Handasah. It is registered in Dubai but has a large London base and about 20,000 staff.
Despite the takeover speculation, Wood has continued to be awarded contracts by large customers. In July it announced a major contract to provide support services for Shell at the Prelude platform off Australia, the world’s largest floating offshore gas facility.