Sidara drops plans to buy UK's Wood Group citing geopolitical risks
Sidara walks away after fourth approach
Final proposal values Wood about 1.56 bln pounds
Shares dive to 118 pence per share
Adds background, Wood Group's response
By Shanima A
Aug 5 (Reuters) -Dubai's Sidara said on Monday it was walking away from its plan to buy UK's John Wood Group WG.L, citing rising geopolitical risks and uncertainty in the financial market, prompting the British engineering group's shares to plunge 40%.
Wood had rejected Sidara's previous four buyout attempts, citing valuation concerns. The Dubai-based engineering and consulting firm had until this Friday to make a firm offer or walk away for at least six months.
There are growing concerns that the 10-month war in Gaza between Israel and Hamas could spread in the Middle East, a key growth area for Wood's strategy.
Wood, which provides consultation, management of assets and engineering services for the energy and materials sector, operates in more than 60 countries with the Middle East and Africa contributing about 18% of its total revenue, according to the group's 2023 annual report.
Wood said on Monday it was confident in its strategic directions and affirmed forecasts for 2024 and next year with expectations for core earnings growth to exceed its medium-term target and significant free cash flow in 2025.
Sidara had previously approached Scotland-based Wood Group with proposals ranging from 205 pence to 230 pence per share with the latest offer valuing Wood Group at about 1.56 billion pounds ($1.99 billion) which it had said would be it final offer.
Sidara had received a deadline extension twice over June and July to make a final offer for Wood Group.
Sidara is the second suitor to walk away from Wood in the past 15 months after U.S.- based Apollo Global Management APO.N abandoned its 1.7-billion-pound bid for the UK-listed company following five approaches that Wood rejected.
Activist shareholder Sparta Capital Management has been pushing Wood Group to consider either selling itself or reconsider its UK listing.
Wood Group shares have lost more than 87% since their all-time high of 927 pence hit in August 2013.
($1 = 0.7822 pounds)
Reporting by Prerna Bedi and Shanima A in Bengaluru; Editing by Varun H K and Emelia Sithole-Matarise
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
