Wood shares fall 40% as Sidara decides not to bid

Wood Group HQ, Aberdeen

Dubai-based firm Sidara said on Monday it does not intend to make a firm offer for John Wood Group plc, the Aberdeen-based engineering and consulting giant, “in light of rising geopolitical risks and financial market uncertainty at this time.”

Wood shares fell almost 40% on Monday to around £1.22, reducing the group’s current stock market value to roughly £900 million.

Last week, Wood had announced another extension — to Augsut 9 — to the “Put Up Or Shut Up Deadline” for Sidara, which on May 29 made “a fourth and final” cash takeover proposal for Wood.

That proposal of £2.30 per share would have valued Wood Group at about £1.59 billion, representing a premium of 52% to its closing share price before the first bid was made.

Wood, one of Scotland’s largest listed firms, has operations in more than 60 countries, employing over 35,000 people.

“Further to the announcements made by Sidara and Wood regarding a possible offer for Wood by Sidara, Sidara confirms that in light of rising geopolitical risks and financial market uncertainty at this time, Sidara does not intend to make a firm offer for Wood,” said Sidara.

In a stock exchange statement, Wood responded by saying: “On 29 May 2024 Dar Al-Handasah Consultants Shair and Partners Holdings Ltd (Sidara) announced that it had submitted to the Board of Wood a fourth proposal to acquire the entire issued and to be issued ordinary share capital of Wood at a final price of 230p per share in cash (the Final Proposal).

“After having weighed all relevant factors, particularly feedback received from Wood shareholders, the Board announced on 5 June 2024 that it had decided to engage with Sidara to see if a firm offer could be made on the same financial terms as the Final Proposal and, accordingly, granted Sidara access to due diligence materials.

“Following an extended period of detailed engagement, Sidara confirmed to Wood on 2 August 2024 that it had completed its due diligence.

“The Board was notified by Sidara this morning that it does not intend to make an offer for Wood in light of rising geopolitical risks and financial market uncertainty. As a result, Sidara is bound by the restrictions set out in Rule 2.8 of the City Code on Takeovers and Mergers (the Code).

“The Board remains confident in Wood’s strategic direction and fundamental prospects. As set out in the HY24 trading update on 11 July, the growth strategy continues to deliver, with further growth in EBITDA, margins and order book in the first half. As we look ahead, we remain focused on delivering our potential, including generating significant free cash flow next year. We are pleased to reconfirm our outlooks for both this year and 2025.

“The Board is grateful for the substantial engagement of its shareholders and the support of its clients and employees throughout this process. The management team looks forward to continuing to deliver against the strategy set out in November 2022.”