Wood Group shares sink after Apollo abandons 1.7 billion pound bid

(Reuters) -Shares in John Wood Group were on track for their biggest one-day drop on record on Monday after U.S.-based Apollo Global Management said it would not proceed with a takeover of the British engineering services firm on its fifth attempt.

The shares initially fell by as much as 40% after private equity firm Apollo said it would not go ahead with an offer following an exploratory bid last month.

By late morning, they had pared some losses but were still down about 34% at 143 pence, returning to levels seen before Apollo's interest was made public earlier in the year.

The buyout giant had until later this week to either submit a formal offer or walk away from talks following last month's bid at 240 pence per share, which valued the company at about 1.66 billion pounds ($2.10 billion).

Wood's board said on April 17 it would engage with Apollo and give it access to due diligence, having previously rejected four earlier proposals from the firm.

Neither party cited any reasons in their statements on Monday for ending discussions.

"We have spoken briefly with Wood, who say Apollo's due diligence was extended and detailed since the decision to engage on April 17 and that little feedback has been given over Apollo's reasons," analysts at Jefferies wrote in a note to clients.

Representatives for Wood and Apollo declined to comment further.

Under UK takeover rules, Apollo cannot launch a takeover offer for Wood for the next six months, except with the company's agreement or in the event that a rival bidder swoops in.

The news comes just days after British consumer group The Hut Group (THG) ended takeover discussions with Apollo after concluding that a preliminary bid by the fund was based on "inadequate valuations".

Last week, Wood released its first-quarter earnings, which saw the group reiterate its 2023 outlook with performance expected to be weighted to the second half of the year.

($1 = 0.7923 pounds)

(Reporting by Pablo Mayo Cerqueiro in London and Eva Mathews in Bengaluru; Editing by Savio D'Souza, Sonia Cheema and Jan Harvey)