ABERDEEN-based John Wood Group saw £500 million wiped from its stock market worth today after its long-running American suitor decided to not make an offer for the company.

The engineering giant had been expected to lose its independence after agreeing to open its books to US investment player Apollo Management Holdings to allow it to carry out due diligence on the company.

Wood had rebuffed a series of unsolicited approaches from Apollo since late January but on April 17 the board announced it had decided to engage with the private equity outfit on the terms of its most recent approach, after receiving feedback from shareholders. The fifth and most recent proposal valued Wood at around £1.7 billion, or 240p per share in cash.

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Apollo was then given until 5pm on May 17 to “put up or shut up” under the takeover code. However, it was announced yesterday that Apollo would not be making an offer.

Shares in Wood had increased from 155p before the Apollo approach was first announced to 219p at the close of trading on Friday, amid expectations in the city that a deal would be done. But the share price collapsed today as investors digested the news that Apollo had walked away.

Shares in Wood ended the day down 75.4p, or 34.4%, at 143.6p, wiping £521.7m from its stock market value.

Wood said in a statement to the stock market: “Following an extended period of detailed engagement, the board notes the announcement by Apollo today that does not intend to make an offer for Wood.

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"As a result, Apollo is bound by the restrictions set out in Rule 2.8 of the City Code on Takeovers and Mergers (which sets out the rules under which Apollo may make an offer for Wood in future).

“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 (earnings before interest, tax, depreciation, and amortisation) 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 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.”

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Apollo Management Holdings said: "Further to the announcements made by Apollo and Wood regarding a possible offer for Wood by Apollo, Apollo confirms, on behalf of certain investment funds managed by it, that it does not intend to make an offer for Wood.

“This is a statement to which Rule 2.8 of the Code applies. Accordingly, Apollo and any person(s) acting in concert with it will, except with the consent of the Panel on Takeovers and Mergers (the "Panel"), be bound by the restrictions set out in Rule 2.8 of the Code.”

The decision by Apollo to withdraw its interest in Wood comes just days after the listed Scottish company highlighted that it had built up “good momentum” in areas such as the North Sea this year.

The company reported on Thursday that the increase in revenues helped it achieve first-quarter earnings in line with expectations. It noted that against the backdrop of a weak performance in the comparable period of 2022, group revenue had increased to around $1.45bn in the first quarter, “reflecting good momentum across all business units".

The group said its order book at March 31 was “slightly lower” than at the end of 2022 at around $5.7bn. However, the order book for delivery in 2023 was up significantly on the position a year previously.

The group did not provide further details. Its global portfolio of operations includes a big North Sea oil services business.

Wood employs around 35,000 people around the world. It was founded by prominent North Sea figure Sir Ian Wood in 1982 when it split from JW Holdings, Scotland's largest fishing company.

Ken Gilmartin succeeded Robin Watson as chief executive in July last year.