Aberdeen-headquartered John Wood Group has rejected a takeover bid from Dubai-based rival Sidara worth £1.42bn, or 205p a share.
Wood, a FTSE 250 engineering consultancy, said the bid "fundamentally undervalued" the firm, as shares later surged by nearly 16.9% (27.9p) closing at 192p, valuing the business at around £1.3bn.
In a trading update posted this morning, the group reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) were up 4% in the first three months of the year.
Ken Gilmartin, CEO, said: "We are now in the second year of our growth strategy and are making good progress, with EBITDA growth, margin expansion and an order book 9% higher than a year ago. We continue to win exciting and complex work across energy and materials, with sustainable solutions representing 40% of our pipeline.
"We are progressing with our Simplification programme and have made some significant appointments this year including welcoming Arvind Balan as our new CFO. I am proud of the strong leadership team we have in place and confident that we will deliver on our significant potential. We are today reiterating our EBITDA guidance for 2024 and our outlook for 2025".
Another bid falls on deaf ears
Less than a month ago the firm was facing calls to sell by Sparta Capital Management, one of the group's top shareholders.
Last year, a bid worth £1.7bn, or 240p a share, was submitted from Apollo Global Management, though they later abandoned their interest.
The rejected offer from Sidara - formerly Dar Al-Handasah - was submitted on April 30 and was 15% less than Apollo's.
Responding to the offer, Wood said: "The board carefully considered the proposal, together with its financial advisers, and concluded that it fundamentally undervalued Wood and its future prospects.
"Accordingly, the board rejected the proposal unanimously on May 8."
Who is Sidara?
The Lebanese-founded design and engineering business rebranded to its new name last year.
It's reported that it sold down a $1.4bn (£1.12bn) stake in Australian engineering services group Worley in April, to prepare to approach Wood.
The company, founded in 1956, generates about half of its $2.3bn (£1.84bn) revenue in the US and was believed to have been interested in Wood as a channel to grow that further through new oil and gas projects and renewable energy.
Around a quarter of Wood's revenue last year was accounted for in the US.