John Wood Group's private equity suitor drops £1.7bn takeover plans

Apollo had put forward five bid proposals, with the fifth for 240p a share in cash, valuing Wood Group at around £1.66bn.

Wood Group rejected the first four approaches, saying they undervalued the group, but finally announced last month it had decided to engage in talks with Apollo after the fifth proposal, having consulted with shareholders.

In response to Apollo’s decision not to bid, Wood group said: “ Following an extended period of detailed engagement, the board notes the announcement by Apollo today that it does not intend to make an offer for Wood.

The statement added: “The board remains confident in Wood's strategic direction and long-term prospects and believes that, following a transformative year in 2022, including new executive leadership and a new strategy, Wood is well placed to deliver substantial value for shareholders.

“Our medium-term targets set out in November 2022 are to deliver adjusted EBITDA growth at mid to high single digit CAGR (compound annual growth rate) with momentum building over time, and to return to positive free cash flow in 2024.

“Furthermore, as set out in the Q1 (first quarter) trading update on 11 May 2023, there is good momentum across all business units which has continued since the end of Q1, with expectations for the full year unchanged.

“The board is grateful for the substantial engagement of its shareholders and the support of its customers and employees throughout this process. The management team looks forward to continuing to deliver against the strategy set out in November 2022.”

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 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 one billion US dollars (£805m).

The company appointed a new chief executive – Ken Gilmartin – last summer, who has been leading a strategy overhaul at the firm.