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Shares in Wood Group (LON:WG) tumbled by 38% to 122.3p on Monday, after Sidara terminated its takeover discussions. The Dubai-based engineering and consulting firm cited “rising geopolitical risks and financial market uncertainty” as reasons for its decision to withdraw its offer.
The news comes after a series of negotiations that began when Sidara made an initial bid of 205p per share on April 30. The offer was increased twice, reaching 220p in mid-May and eventually 230p per share by the end of May—a 52% premium over Wood's share price before the first approach.
Despite this elevated offer, Wood Group rejected Sidara’s bids, citing valuation concerns. Sidara had until August 9 to finalize the offer or step away for a minimum of six months. The collapse of the talks follows a period of market instability exacerbated by weak U.S. economic data and escalating tensions in the Middle East.
In response to Sidara’s withdrawal, Wood Group reaffirmed its commitment to its strategic direction and financial outlook. The company emphasized that its growth strategy, detailed in the half-year trading update on July 11, continues to show progress. Wood Group noted improvements in EBITDA, margins, and order books for the first half of the year. The firm remains focused on generating significant free cash flow and reiterated its forecasts for 2024 and 2025. The takeover bid's termination comes at a time when the market is navigating uncertainty, raising questions about future acquisition opportunities and strategic adjustments for Wood Group.
