5th Aug 2024 14:12
(Alliance News) - The withdrawal of a potential bidder for John Wood Group PLC comes as companies are "battening down the hatches" as they consider the state of the world, an analyst on Monday said.
Aberdeen, Scotland-based John Wood said Dar Al-Handasah Consultants Shair & Partners Holdings Ltd, known as Sidara, said it does not intend to make a firm offer for the Aberdeen, Scotland-based John Wood.
Sidara had been given multiple extensions by the UK Takeover Panel to the put-up-or-shut-up deadline to give a firm intention to make an offer, the latest deadline was this coming Friday.
Back in June, John Wood received a fourth possible takeover proposal from Sidara, worth 230 pence per share. Sidara has steadily increased its bid proposal after making an initial approach worth 205p per share, which John Wood disclosed in early May.
In May 2023, a bidder owned by the US's Apollo Global Management Inc decided against making a firm takeover offer for John Wood, having previously made five tentative proposals.
John Wood shares fell 37% to 123.70p on Monday in London. The stock is now down 23% over the past 12 months.
Sidara blamed "rising geopolitical risks and financial market uncertainty" for its ultimate decision to not make a takeover offer.
Tensions in the Middle East ratcheted higher over this past weekend.
A senior official said the US is ready for "every possibility" amid fears of war between Iran and Israel, while telling the Israelis it is "urgent" to reach a ceasefire deal in Gaza. The US remarks came after Iran and its regional allies vowed retaliation for the killings of a Hamas leader in Tehran and a Hezbollah commander in Beirut, fuelling fears of a broader Middle East conflict.
In response to Sidara's announcement, John Wood reconfirmed the outlook for the rest of 2024 and for 2025 that it had provided in a trading outlook last month. John Wood had report growth in earnings, margins and its order book in the first half of the year. It will release its full interim results on August 20.
"As we look ahead, we remain focused on delivering our potential, including generating significant free cash flow next year," the company said on Monday.
AJ Bell's Investment Director Russ Mould noted the Dubai company had been "wooing" John Wood for months, with three offers failing to win over the board of the Scottish company.
But since the initial bid 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," he added.
"Companies are battening down the hatches as they consider the state of the world and prepare to ride out the potential storm," he remarked.
By Jeremy Cutler, Alliance News reporter
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