UK’s Wood Group Nixes Dubai AE Sweetened $1.9B Buyout Bid

U.K.-based global energy engineering consultant Wood Group said May 23 it has rejected a third takeover bid in recent weeks from Dubai-based engineer Sidara, formerly Dar Group—with the latest offer valued at $1.93 billion.

Board members of the Aberdeen, Scotland-based company said the Sidara bid “continued to significantly undervalue the Group and its prospects,” and unanimously rejected the offer.

Two previous bids, made May 8 and May 15, were valued at $1.8 billion and $1.87 billion, respectively.

Sidara has until June 5 to make a formal offer or end talks under U.K. takeover rules, Wood Group said in its announcement. 

Sidara, which changed its name in 2023, had not posted an announcement of the latest acquisition development and could not be reached by ENR by press time. 

The firm also is parent of Lebanon-based engineering and planning consultant Dar Al-Handasah Consultants, U.K.-based project management firm Currie & Brown, and U.S.-based global architecture firm Perkins & Will and global engineer TYLin. They continue to operate independently under their brands, the firm said at the time of the name change.

The new acquisition attempt occurs one year after private equity firm Apollo Global Management withdrew its announced offer to buy Wood Group, multiple media reports have said.

Wood Group ranks No. 13 on ENR’s latest Top 150 Global Design Firms list, reporting $3.48 billion in 2022 global engineering revenue—about $2.87 billion outside the U.K., with 36% of the total in the U.S. 

Sidara, listed as Dar Group, ranks at No. 23, reporting $2.2 billion in 2022 revenue—all international and 46% in the U.S. The firm also ranks at No. 134 on ENR’s latest Top 250 Global Contractors list, reporting about $2.84 billion in global construction revenue in 2022.

In a January update of 2023 results, Wood Group reported revenue of about $6 billion, up 9% with growth across all business units. It said year-end adjusted earnings were slightly ahead of guidance, at $420 million to $425 million, with adjusted profit at about 7%.

Wood said it would boost profitability and deliver “significant free cash flow” in 2025. In a note earlier this month, Wood Group announced a “simplification” program under which it aimed to increase profits to about $10 million this year and about $60 million in 2025. 

“We are now one year into our strategic growth journey and our results continue to show clear progress,” CEO Ken Gilmartin said in a January results release. In recent comments to ENR, he noted that government funding programs “have driven a significant increase in our early phase solutions,” adding there was more investment last year from oil and gas clients “as the energy security agenda has increased globally.”

Wood Group noted key energy projects underway in the Gulf of Mexico, Germany, Spain and offshore U.K.

On May 9, however, Wood Group reported a 6% drop in revenue to $1.36 billion for its first quarter 2024 ending March 31, compared to the same period last year, “in part reflecting a change in its strategy that focuses on businesses with higher margins,” the firm said. Wood Group cited “weakness in the minerals market” and reduced engineering, procurement and construction work.

Sidara said in April that it was selling 19% of its stake in Australia-based engineer Worley, which is publicly traded, reducing it to about 4.5%. The Dubai firm, a Worley shareholder for seven years, had been its largest and had attempted a takeover in 2016. Media estimated the sale to be worth about $927 million.