The share price of the British oil services company John Wood Group has plunged by more than a third after a Dubai-based suitor pulled out of a purchase amid global market turmoil.
In a statement to the stock market on Monday the engineering company Sidara said it had pulled out of a bid for Wood “in light of rising geopolitical risks and financial market uncertainty”.
Shares in Wood, a member of London’s FTSE 250 index of mid-sized companies, fell by 37% to 124p when trading opened on Monday morning, putting it on course for its lowest close since October 2022.
Stock markets globally slumped on Monday, after weak US economic data caused fears of a recession in the world’s largest economy, which could slow growth across the rest of the world. Brent crude oil futures prices fell by 1.6% to $75.56 a barrel on Monday, as traders braced for a slowdown in demand.
The FTSE 250 fell by 2.9%, and the blue-chip FTSE 100 fell by 2.3%, after share prices in Asia and Europe also slumped. Japan’s benchmark Nikkei 225 index endured its worst one-day decline since 1987.
Sidara did not detail which geopolitical risks were at play. However, it is thought that one of the main factors is the crisis in the Middle East. That was prompted by Israel’s response to Hamas’s attack on 7 October.
Sidara was founded in Beirut, Lebanon, in 1956 as Dar al-Handasah, and maintains offices in the capital. There are concerns that Lebanon may be drawn into conflict with Israel, particularly after Israel claimed it killed Hezbollah’s top commander, Fuad Shukur, in a strike in Beirut last week. On Monday, the Islamist militant group launched drone strikes on northern Israel.
Wood makes 18% of its revenues in the Middle East and Africa.
Sidara, which mainly carries out engineering and consultancy services on large building projects, makes about 45% of its revenues in North America, where there is uncertainty over future policy with less than 100 days until the US presidential election.
That uncertainty extends to policy on drilling for fossil fuels, with a contrast between Donald Trump’s “drill, baby, drill” approach and Kamala Harris’s more measured support for fossil fuel extraction. Wood makes one-third of its revenues from North America.
after newsletter promotion
Wood, which is headquartered in Aberdeen, Scotland, employs more than 30,000 people worldwide.
Wood rejected several bids from the private equity firm Apollo in 2023, and had rejected several initial approaches from Sidara after its first offer in May. However, in June Wood said it would work with Sidara on a takeover at 230p a share.
