Shares of UK-based John Wood Group PLC (GB:WG) tumbled by nearly 38% as of writing following its failed takeover talks with Dubai’s Sidara Group. Notably, Sidara Group announced that it had chosen not to make an offer for Wood Group, citing growing geopolitical tensions and uncertainty in the financial markets. Year-to-date, WG stock has lost 27% in trading.
Wood Group is an engineering services company with operations in about 40 countries. Meanwhile, Sidara, also known as Dar Al-Handasah, is a group of specialist firms focused on designing, project management, digital solutions, and more.
Wood Group’s Failed Takeover
Earlier in May, Sidara Group proposed to acquire Wood Group at 205p per share. However, Wood Group rejected this and two more subsequent offers, stating that they undervalued the company’s worth. Later in June, Wood Group expressed interest in negotiating a potential takeover with Sidara Group, which resulted in a rise in its share price. In its fourth offer, Sidara Group raised the bid to 230p per share.
Most recently, Wood Group extended the deadline for Sidara to submit a firm offer until August 9.
This deal marks the second potential deal for Wood to fall through in just over a year. In May 2023, private equity firm Apollo Global (APO) chose not to proceed with a 240p per-share offer for the company.
Wood Group’s Half-Yearly Update
In July, Wood Group released its trading update for the half year of 2024, with revenue down 6% year-over-year to $2.8 billion. Meanwhile, the company reported a 4% year-over-year increase in its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) to $210 million, thanks to a higher EBITDA margin of 7.4%, up from 6.8% last year.
For the full year, the company expects a high single-digit growth in adjusted EBITDA, excluding the effects of disposals. The company further expects its performance to be more robust in the second half of the year, reflecting the seasonality of its business.
Wood Group will announce its half-year results for 2024 on August 20.
Is Wood Group a Good Buy?
On TipRanks, WG stock has received a Hold rating based on one Buy, one Hold, and one Sell recommendation. The John Wood share price forecast is 177.13p, which is 46% below the current trading price.
