John Wood Group, the beleaguered engineering firm, has confirmed that Dubai-based suitor Sidara is making a second attempt at a takeover, less than a year after abandoning a previous deal. The Aberdeen-based Wood Group announced it had received an approach from Sidara, causing its shares to surge by over 33% in Monday afternoon trading.
Sidara had previously walked away from a deal last August, citing global market instability and geopolitical risks, after proposing four takeover bids – the last of which valued Wood Group at around £1.56bn. It's believed that Sidara has returned due to the recent significant drop in Wood's share price.
The decision by Sidara to pull out of the deal last summer resulted in a sharp fall in Wood Group's shares, further disappointing investors who have already endured a languishing share price and multiple failed takeover attempts. The FTSE 250-listed Wood, which offers oilfield and engineering services, saw its shares plummet 80% over the past year, reducing its stock market value to just over £200m – a stark contrast to the £1.6bn bid made by Sidara last year.
Adding to its challenges, concerns about the financial and governance culture within its project arm following a recent independent review, as well as substantial debts, have compounded Wood's stock market troubles. In another blow, Wood Group's chief financial officer Arvind Balan resigned last week after admitting to making a false claim about a chartered accountant qualification.
Sidara, a privately-owned conglomerate of engineering and design firms based in the United Arab Emirates, has shown interest in bidding for Wood Group. This comes after a failed attempt by private equity firm Apollo to acquire Wood Group in 2023. Despite having four previous offers turned down, Apollo proposed a £1.68bn deal, equivalent to 240p per share, but eventually dropped plans to make a formal offer.
Wood Group, which operates in over 60 countries, provides consultation, management, and engineering services to the oil and mining sector. However, it has recently shifted its focus towards its sustainable business, assisting companies with decarbonisation and energy transition.
