John Wood Group Shares Plunge as Sidara Abandons Acquisition Talks

The Dubai-based engineering giant, Sidara, has withdrawn from its prolonged acquisition attempt of John Wood Group, citing increasing geopolitical risks and economic market instability.

Shares of John Wood Group plummeted by 73p, or 37%, closing at 123½p, reaching their lowest point since December 2022.

Concerns are mounting that the conflict in Gaza could extend throughout the Middle East, a vital growth region for Wood. In the previous year, the Middle East and Africa division contributed approximately 18% of the FTSE 250 engineering consultancy’s annual revenue.

A Sidara spokesperson commented: «Given the heightened geopolitical risks and current financial market uncertainties, Sidara has decided not to proceed with a formal offer for Wood.»

Earlier in May, Sidara’s three proposals were declined due to claims of undervaluing Wood and its potential, before Wood’s board agreed in June to negotiate a prospective 230p-per-share deal. Wood then allowed its Dubai-based competitor access to financial data, setting an August 9 deadline to decide on a conclusive bid or withdraw.

Last week, Wood announced confirmation from Sidara of completed due diligence. Sidara appeared keen to expand in North America, where Wood generated around a third of its revenue in 2023.

Sidara’s 230p-per-share proposal offered a 52% premium over Wood’s closing share price on April 29, following their initial 205p offer.

Following Sidara’s exit, Wood stated: «The board remains confident in Wood’s strategic direction and core prospects for the upcoming year.»

The company reconfirmed its forecast for this year and 2025. In a recent trading update, the company projected that adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) would be around 4% higher for the first half of 2024, totaling $210 million.

Last year, Apollo Global Management, a private equity firm, made multiple bids for Wood, eventually leading the board to open its financial records after a £1.7 billion indicative offer at 240p per share. However, the private equity firm withdrew in May of last year.

This year, Wood has faced pressure from activist shareholder Sparta Capital Management, pushing the company to consider either a sale or a listing in New York. In April, Sparta urged the board to conduct a strategic review and «explore the best ways to maximise shareholder value.»

Headquartered in Aberdeen and founded in 1982 by Ian Wood, the company initially focused on North Sea oil services. After floating on the London Stock Exchange in 2002, it diversified to consultancy, management, and engineering services across over 60 countries. Today, it employs around 35,000 people in sectors such as oilfield services, renewables, chemicals, life sciences, minerals, and infrastructure.

Founded in 1956 as Dar al-Handasah, Sidara has its official registration in Dubai but maintains a significant base in London with around 20,000 staff members.

Despite the buyout speculation, Wood continues to secure contracts with major clients. In July, the company announced a substantial contract to provide support services for Shell at the Prelude platform off Australia’s coast, the world’s largest floating offshore gas facility.