Sidara, candidate for Wood Group takeover, abandons takeover talks due to increasing ‘geopolitical risks’
- Dubai-based Sidara made a bid of 230 pence per share in late May
Engineering firm Sidara has withdrawn from a potential takeover of John Wood Group, citing ‘increasing geopolitical risks and uncertainty in financial markets’.
The Dubai-based company made a 230p-per-share offer in late May, valuing Wood Group at £1.6bn, after three previous unsolicited bids were rejected.
Wood Group has entered into discussions with Sidara about a takeover, but after the due diligence investigation was completed, Sidara announced on Monday that it did not wish to make a bid.
According to the organization, the decision was taken “in light of increasing geopolitical risks and uncertainty on the financial markets.”
Get out: Engineering firm Sidara withdraws from potential takeover of Wood Group
Under City’s takeover rules, it must wait six months before making another bid for Wood Group.
After the announcement, John Wood Group Shares fell 38.1 percent to £1.22 by Monday afternoon, making them by far the biggest fallers on the FTSE 250 Index.
Danni Hewson, head of financial analysis at AJ Bell, commented: ‘The global outlook has changed, market volatility has gripped investor sentiment and Sidara can breathe a sigh of relief that the long relationship has ended on this note.
‘Companies are preparing for the state of the world and looking at the potential storm.’
Sidara is the latest company to abandon its bid to acquire Wood Group since private equity giant Apollo Global Management abandoned its bid to acquire Wood Group.
Apollo made five bids for Wood Group, with the final bid valuing the business at £1.7bn. However, in May 2023, Apollo left without giving reasons.
Wood Group has avoided the fate of several large London-listed companies that have fallen into foreign hands in recent years, including G4S, Neptune Energy, Hotel Chocolat and supermarket chain Morrisons.
Many more companies have agreed to multi-billion pound takeover offers in recent months, including Robinsons Squash maker Britvic, cybersecurity specialist Darktrace, music rights investors Hipgnosis Songs Fund and video game services provider Keywords Studios.
Wood Group employs more than 35,000 people in 60 countries, providing consulting and engineering services to the energy and materials industries.
In its latest half-year results, the company reported that adjusted pre-tax profit rose 4 percent to about $210 million, thanks to margin growth that offset lower revenues.
Revenue fell about 6 percent to $2.8 billion, partly due to problems at its minerals division and a “strategic shift” away from engineering, procurement and construction.
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