Shares in Wood Group have closed the day down nearly 40% after a long-running Middle East suitor withdrew its takeover interest in the engineering giant.

Dubai-based Sidara, which had seen several approaches for Wood rebuffed before being granted access to the Scottish firm's books to explore an offer, cited “rising geopolitical risks and financial market uncertainty at this time” as it declared it “does not intend to make a firm offer” for the business.

The announcement came shortly after Wood extended the “put up or shut up” deadline for Sidara to make a firm offer for the company to 5pm on August 9. Wood had several weeks earlier, on June 5, given Sidara “access to due diligence materials in order to explore whether a firm offer could be made on the same financial terms as the fourth proposal submitted to the board” on May 29. That approach valued Wood at 230p per share or around £1.6 billion.

READ MORE: Magnet project raises hopes for troubled Sauchiehall Street

Now, however, Sidara has withdrawn its interest.

Sidara said in a statement to the stock market: “Further to the announcements made by Sidara and Wood regarding a possible offer for Wood by Sidara, Sidara confirms that in light of rising geopolitical risks and financial market uncertainty at this time, Sidara does not intend to make a firm offer for Wood.”

Sidara's decision to walk away comes after Wood underlined its confidence to stand alone when it updated the City on trading for the first half in July, despite a fall in interim revenues.

Chief executive Ken Gilmartin declared Wood's growth strategy was continuing to deliver and that the firm remained on course to meet full-year expectations of high single digit percentage growth in adjusted earnings. Its performance in the second half is expected to improve in line with the seasonality of the sector.

Responding to Sidara's announcement, Wood said: "The board was notified by Sidara this morning that it does not intend to make an offer for Wood in light of rising geopolitical risks and financial market uncertainty.

READ MORE: Cala acquires renowned site on Glasgow's southside

"The board remains confident in Wood's strategic direction and fundamental prospects. As set out in the HY24 trading update on 11 July, the growth strategy continues to deliver, with further growth in EBITDA, margins and order book in the first half.

"As we look ahead, we remain focused on delivering our potential, including generating significant free cash flow next year. We are pleased to reconfirm our outlooks for both this year and 2025.

"The board is grateful for the substantial engagement of its shareholders and the support of its clients and employees throughout this process. The management team looks forward to continuing to deliver against the strategy set out in November 2022. Wood will publish its half year results on 20 August 2024."

Wood employs around 4,500 people in Aberdeen and its North Sea operations, and a global workforce of about 35,000.

Wood first confirmed early in May that it had received bid interest from Sidara. The company said directors had spurned an initial approach based on a 205p per share purchase price.

READ MORE: Jobs go as Scottish discount website Kooble collapses

In June, Wood directors decided to engage with Sidara regarding the fourth approach at 230p per share, which they said was final, after getting feedback from investors.

Shares in Wood ended the session down 69p, or 35.03%, at 128p.