A year after rejecting a £1.56bn bid, Wood is now likely to accept a far lower offer from the UAE firm.

Troubled Scottish engineering firm John Wood Group is now leaning towards a £242 million takeover by UAE-based Sidara, just a year after rebuffing a significantly higher offer from the same company.

The Aberdeen-headquartered firm confirmed that Sidara, a privately owned Dubai-based network of engineering and design businesses, had submitted a new non-binding conditional proposal of 35p per share. That figure, while modest, also includes a potential $450 million (£342m) cash injection aimed at stabilising Wood’s shaky finances.

This fresh bid marks a dramatic turn in fortunes. In 2023, Wood rejected a £1.56 billion offer from Sidara, only for its value to plummet over the following year amid serious financial and governance issues. The group’s share price has tumbled sharply, driven by accounting restatements, scrutiny over corporate oversight, and mounting debt pressure.

Now, with few viable alternatives on the table, Wood’s board appears prepared to accept a deal once seen as too low. “The board of Wood currently believes that the possible offer represents the better option for Wood’s shareholders, creditors and other stakeholders,” the company said in a statement on Monday.

It follows months of financial turbulence and failed attempts to strengthen its capital structure. Wood has been exploring refinancing options in parallel with the renewed talks with Sidara, but advisers now believe the takeover route offers a more secure future for the group.

“The board of Wood believes that the company needs to have a more sustainable capital structure, and this requires substantial new capital in order to diversify Wood’s financing sources and reduce its indebtedness over time,” the company said.

Wood confirmed in February that it had re-entered discussions with Sidara, which were extended again in March. The latest proposal suggests Sidara’s patience with the engineering giant may now be rewarded—albeit at a substantial discount from its original approach.

At its height, the previous £1.56 billion offer had represented a generous premium on Wood’s trading value. However, since that bid collapsed, the company has faced a series of blows that have eroded investor confidence and sent shares tumbling.

Earlier this year, governance failings came to light that forced Wood to restate elements of its financial accounts. At the same time, concerns about its ability to manage debt and meet long-term obligations have mounted, despite a pipeline of global energy and infrastructure contracts.

Sidara’s interest reflects a strategic ambition to expand its global footprint, particularly across energy transition projects in the North Sea and beyond—areas where Wood retains valuable technical expertise despite its financial woes.

The board’s indication that it would be “minded to recommend” the new offer now signals a near-total reversal of last year’s stance. Shareholders, many of whom had voiced frustration over the rejection of the earlier bid, are expected to support the current proposal given the company’s weakened position.

No final agreement has yet been reached, and Sidara’s bid remains conditional. Still, with few rivals circling and pressure mounting from stakeholders, a deal appears increasingly likely in the weeks ahead.

Wood’s legacy as a key player in the UK’s offshore engineering sector now hangs in the balance. A successful takeover by Sidara would mark the latest in a string of high-profile British firms to fall under foreign ownership, driven not by strength but by financial vulnerability.