How 'market volatility' has stymied attempts to take over Scottish energy services giant

The UAE-based suitor of Wood has given up its attempt to buy the Aberdeen-headquartered energy and engineering services heavyweight, dropping its fourth bid due to “rising geopolitical risks and financial market uncertainty”.

Wood CEO Ken Gilmartin. Picture: contributed.

Wood said Dubai-based engineering and consulting firm Sidara had submitted a fourth bid, at a final price of 230p per share in cash, with the Aberdonian FTSE250 firm having decided to engage with Sidara to see if a firm offer could be made on these terms.

Sidara has now today notified Wood that it does not intend to make an offer given the socio-economic backdrop “in light of rising geopolitical risks and financial market uncertainty”.

Wood, which will publish its half-year results on August 20, said: “The board remains confident in Wood's strategic direction and fundamental prospects. As set out in the HY24 trading update on 11 July, the growth strategy continues to deliver, with further growth in [earnings before interest, taxes, depreciation, and amortisation], margins and order book in the first half.

“As we look ahead, we remain focused on delivering our potential, including generating significant free cash flow next year. We are pleased to reconfirm our outlooks for both this year and 2025. The management team looks forward to continuing to deliver against the strategy set out in November 2022.

Sidara had initially offered 205p a share at the end of April, raising this twice in May, with the latter offer valuing the Scots group at some £1.66 billion. The Middle Eastern firm’s approaches came after US private equity suitor Apollo Management dropped its proposed takeover of Aberdeen-headquartered Wood in May 2023.

AJ Bell head of financial analysis Danni Hewson has now noted that Wood’s shares fell today due to “disappointment coupled with uncertainty” in response to the news of Sidara withdrawing.

She added: “The Dubai company had been wooing John Wood for months, with three offers failing to win over the board of the Scottish company. But a couple of extensions later Sidara is walking away. The global outlook has shifted, market volatility has gripped investor sentiment and Sidara might well be breathing a sigh of relief that the lengthy courtship ended as it did, when it did.

“Companies are battening down the hatches as they consider the state of the world and prepare to ride out the potential storm.”

Wood has 35,000 staff in 60 countries, including thousands in the UK, and is now led by chief executive Ken Gilmartin. The group originated as a fishing company with roots dating back to the 1890s, and proved pivotal for Scottish business tycoon Sir Ian Wood, now one of Scotland’s richest men, who joined in 1964 to help his father with his firm. That was meant to be a temporary move, but “I discovered that I could make things happen, that I could change things”, he later said, and it became an oil services giant.