Just days before the Aug. 9 deadline to make a final takeover bid, engineer Sidara, formerly of Dubai-based Dar Group, has halted its plan to buy the industrial and energy services company of the UK Wood Group plc, citing “increased geopolitical and financial risks”. market uncertainty”.
Sidara, which had only been negotiating with Wood Group since June based on a $2.03 billion offer after rejecting three lower bids, did not provide further details on the August 5 withdrawal of the deal after completion of due diligence. The company also declined to respond to an inquiry from ENR.
The media speculated about increased political tension in the Middle East since hostilities began on October 7 in Gaza and Israel. The region, along with Africa, generated 18 percent of Wood Group’s revenue last year, the Aberdeen, Scotland-based company said earlier.
The company, which also has a large operation in the United States, did not elaborate on the withdrawal of the purchase, but said it is “confident in [its] strategic direction and fundamental perspectives”.
Wood Group chief executive Ken Gilmartin noted in a mid-July market update that as part of a refocused “simplification” strategy announced in 2022, the company has “secured” about 25 million dollars of the $60 million in annualized savings it was aiming for next year and expects a 4% increase in net profits for the current half that ended June 30.
Still, Wood Group’s share price on the London Stock Exchange fell more than 38% on Aug. 5 to about $121 after the deal update, but has since recovered to $161 on August 8.
Wood Group will report H1 2024 results to investors on August 20. The firm was ranked 46th in the most recent ranking of ENR’s Top 500 Design Firms.
Sidara is the second potential buyer of Wood Group in recent years to withdraw its offer, following private equity firm Apollo Global Management in May 2023.
