Wood Group Stock Crashes by 37% Following Sidara’s New Withdrawal
In a significant development, Dubai-based engineering firm Sidara has decided to abandon its takeover bid for John Wood Group. The announcement comes after a months-long negotiation process. Sidara had initially proposed an acquisition offer of 230 pence per share, representing a 52% premium over Wood Group’s share price. However, the company has cited “rising geopolitical risks and financial market uncertainty” for leaving the deal.
Wood Group Shares Drop Dramatically
Following Sidara’s withdrawal, shares of John Wood Group plummeted 37% to 123.8 pence in early London trading. This marks the most significant drop in the company’s stock since May 2023. The abrupt decline reflects the volatility faced by Wood Group’s investors, who have experienced a turbulent period with multiple takeover offers in recent years. Notably, this starkly contrasts the high of nearly 229 pence per share reached after a competing bid from Apollo Global Management Inc. last year.
Market Context and Future Implications
Sidara’s decision coincides with broader market fluctuations and economic uncertainties. European and Asian markets also experienced declines following disappointing U.S. labour market data, contributing to a cautious global investment climate. Financial instability and the shifting geopolitical landscape have influenced Sidara’s decision, highlighting the risks involved in high-stakes acquisitions.
Recent History of Bids
Sidara’s bid for Wood Group follows a pattern of intense acquisition interest. The company had been negotiating since April, initially offering 205 pence per share, which was subsequently increased to 230 pence in May. The prolonged talks and multiple bids from other entities, such as Apollo Global Management, have created substantial volatility in Wood Group’s stock performance.
Conclusion
The termination of Sidara’s takeover plans marks another chapter in a period of instability for Wood Group. With the company’s shares experiencing sharp declines, stakeholders will watch closely for further developments or potential new bids. The broader market conditions will likely continue influencing the landscape for future acquisition attempts.
