Dubai-based engineering company Sidara on Monday said it will not make a firm takeover offer for the British oilfield services and engineering firm John Wood Group, citing geopolitical risks and financial market uncertainty.
In May, Sidara raised its offer price to 230 pence per share, representing a premium of 52 per cent over Wood’s pre-bid share price.
But now, the Dubai-based company, which is also known as Dar Al Handasah, chose to no longer pursue the takeover “in light of rising geopolitical risks and financial market uncertainty at this time”.
Wood's board said it “remains confident in Wood's strategic direction and fundamental prospects”.
“As we look ahead, we remain focused on delivering our potential, including generating significant free cash flow next year,” the company said.
The announcement comes as a global market sell-off intensifies over fears of a US recession and a broadening of war in the Middle East.
Major indexes across the globe – including Japan's Nikkei, Abu Dhabi Securities Market and the US's Dow Jones Industrial Average – all were posting losses as of 7.30pm UAE time.
Markets in the GCC have been responding to the possibility of a potential spillover in the Gaza war, while US-based markets have continued their downwards trend following weak employment figures released last week.
Sidara's May proposal came roughly one year after private investment firm Apollo Global Management ended its own pursuit of Wood. Apollo Global Management made five proposals to take over Wood, included an offer of up 240 pence per share.
John Wood Group – also known as Wood – is headquartered in Aberdeen, Scotland, and provides services across energy and materials markets.
Shares in the company fell more than 36 per cent during trading on Monday.