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Dubai’s Sidara backed out of its plans to acquire British oil services and engineering firm Wood Group, it said in a statement yesterday. The Dubai-based firm cited geopolitical risks and financial market volatility as reasons for its change of plans. EnterpriseAM UAE was unable to reach company representatives.
ICYMI- Sidara had until 9 August to submit its final offer to acquire Wood Group after the board approved the extension of the initial deadline set for the end of July. After Wood rejected three previous bids, Sidara was granted due diligence and allowed to engage with Wood in June.
REMEMBER- Sidara submitted four acquisition bids for Wood Group, which were all rejected for “significantly undervaluing” the company. The engineering and consulting firm’s latest bid saw it offer to acquire Wood Group at GBP 2.3 per share, valuing the company at up to GBP 1.59 bn, which it said would be its final offer.
One of Wood’s biggest markets is the Middle East: The Middle East and Africa contribute about 18% of the construction company’s revenues, according to its 2023 annual report (pdf). Israel’s ongoing war in Gaza as well as the brewing war between Israel and Lebanon — and Iran — is fueling geopolitical uncertainty in this corner of the world.
This isn’t the first acquisition bid for Wood to fall through: The company’s shareholders have urged it to consider listing in the US or selling the company after negotiations with buyout group Apollo to buy the company fell through. Apollo’s bid — which it withdrew last month — had valued the company at GBP 1.66 bn at the time. Wood’s shares had fallen about 25% over the past year, Bloomberg reports, giving it a market value of GBP 1.1 bn.
Market reax: Wood Group’s shares plunged 40% on the news.
