New York private equity firm Apollo Global Management announced on Monday morning it “does not intend to make an offer” for Aberdeen-based global engineering firm John Wood Group.
Shares of Wood fell about 35% to £1.40.
Wood had extended a “put up or shut up” takeover offer deadline for Apollo to May 17.
Apollo said on April 4 it made a “final” and “possible offer” for Wood Group pitched at £2.40 per share in cash, valuing Wood at £1.66 billion.
One of Scotland’s biggest companies, Wood operates in more than 60 countries and employs 35,000 people.
In a response to Apollo’s statement, Wood Group said: “Following an extended period of detailed engagement, the board notes the announcement by Apollo today that it does not intend to make an offer for Wood.
“As a result, Apollo is bound by the restrictions set out in Rule 2.8 of the City Code on Takeovers and Mergers.
“The board remains confident in Wood’s strategic direction and long-term prospects and believes that, following a transformative year in 2022, including new executive leadership and a new strategy, Wood is well placed to deliver substantial value for shareholders.
“Our medium-term targets set out in November 2022 are to deliver adjusted EBITDA growth at mid to high single digit CAGR, with momentum building over time, and to return to positive free cash flow in 2024.
“Furthermore, as set out in the Q1 trading update on 11 May 2023, there is good momentum across all business units which has continued since the end of Q1, with expectations for the full year unchanged.
“The board is grateful for the substantial engagement of its shareholders and the support of its customers and employees throughout this process.
“The management team looks forward to continuing to deliver against the strategy set out in November 2022.”
On May 11, Wood Group said in a trading update for its AGM that its revenue increased to around $1.45 billion for the quarter ended March 31, 2023.
Wood Group said on May 11 the revenue reflected “good momentum across all business units and higher pass-through revenue” and that its order book at March 31 was around $5.7 billion, slightly lower than December 2022.
On March 28, Wood CEO Ken Gilmartin admitted in the firm’s 2022 results announcement that “… we have not delivered for our shareholders in recent years.”
Gilmartin’s admission came as Wood reported that 2022 revenue rose 4% to $5.4 billion and adjusted EBITDA was $385 million, at the top end of guidance.