Yahoo Finance North Sea engineer Wood Group plummets as suitor ends £1.7bn takeover chase
Shares in Wood Group – one of the North Sea's biggest services companies – have collapsed by as much as 41pc after private equity giant Apollo walked away from a £1.7bn takeover bid.
US group Apollo Management on Monday said it would not be making an offer for Aberdeen-based Wood Group.
Apollo has made five attempts to buy the business since February but abandoned the pursuit just two days before the May 17 deadline to make a firm bid or walk away.
Wood Group was on track for its worst one-day share price fall after the announcement, with shares down 33pc by mid-morning. The stock had soared since February amid the takeover interest.
Wood Group provides oilfield services around the world, including to drillers in the North Sea and US shale operators.
Apollo’s most recent bid had valued Wood Group at around £1.66bn.
Wood Group rejected the first four approaches, saying they undervalued the group, but announced last month it was engaging in talks with Apollo after a fifth proposal.
In response to Apollo’s decision not to bid, Wood Group said its board “remains confident in Wood’s strategic direction and long-term prospects”.
It said: “Following a transformative year in 2022, including new executive leadership and a new strategy, Wood is well placed to deliver substantial value for shareholders.
“The board is grateful for the substantial engagement of its shareholders and the support of its customers and employees throughout this process.”
Wood Group first revealed in February that it had rejected three unsolicited approaches from Apollo, saying at the time that it believed each “significantly undervalued the repositioned group's prospects”.
Wood Group has around 35,000 staff, largely specialising in engineering and consultancy for the energy, minerals, chemicals and life sciences sectors.
It offloaded its environmental consulting division last year in a move to reduce its debt by more than $1bn (£805m).
The company appointed a new chief executive, Ken Gilmartin, last summer, who has been leading a strategy overhaul at the firm.
Wood Group has been left with a hefty debt pile since taking over rival Amec Foster Wheeler for £2.2bn in 2017. It has also faced legacy lawsuits, including a $115m settlement made last year for a damages claim filed in 2016.
