John Wood Group suitor Sidara walks away

Engineering company Sidara has pulled out of a potential takeover of John Wood Group, blaming ‘rising geopolitical risks and financial market uncertainty.’

The Dubai-based business submitted a 230 pence per share bid in late May, valuing Wood Group at £1.6billion, after three prior unsolicited proposals were rejected.

Wood Group entered takeover discussions with Sidara, but having completed its due diligence, Sidara announced on Monday that it does not plan to make a bid. 

It said the decision was taken ‘in light of rising geopolitical risks and financial market uncertainty.’

Walk away: Engineering company Sidara has pulled out of a potential takeover of Wood Group

It must wait six months under City takeover rules before making another offer for Wood Group.

Following the announcement, John Wood Group shares slumped 38.1 per cent to £1.22 by Monday lunchtime, making them the biggest faller by far on the FTSE 250 Index.

Danni Hewson, head of financial analysis at AJ Bell, remarked: ‘The global outlook has shifted, market volatility has gripped investor sentiment, and Sidara might well be breathing a sigh of relief that the lengthy courtship ended as it did when it did.

‘Companies are battening down the hatches as they consider the state of the world and prepare to ride out the potential storm.’

Sidara is the latest business since private equity giant Apollo Global Management to abandon attempts to acquire Wood Group.

Apollo put forward five offers for Wood Group, with the last of them valuing the firm at £1.7billion, before walking away in May 2023 without giving an explanation.

Wood Group has avoided the fate of multiple major London-listed firms that have fallen into foreign ownership in recent years, including G4S, Neptune Energy, Hotel Chocolat, and supermarket chain Morrisons.

Many more have agreed to billion-pound takeover offers in the past few months, such as Robinsons Squash maker Britvic, cybersecurity specialist Darktrace, music rights investors Hipgnosis Songs Fund, and video games services business Keywords Studios.

Wood Group employs more than 35,000 people across 60 countries who provide consultation and engineering services for the energy and materials industries.

In its latest half-year results, the company reported adjusted earnings before nasties rose by 4 per cent to around $210million thanks to margin growth offsetting lower revenues.

Turnover fell by about 6 per cent to $2.8billion, which it partly blamed on problems in its minerals division and a ‘strategic shift’ away from engineering, procurement and construction work.