Shares in Wood Group tumbled by 7.5% after the Aberdeen engineering services giant dismissed a second takeover approach from a Dubai based peer, which one analyst branded “insultingly low”.

The Scottish firm declared the fresh approach from Sidara, one of the world’s largest planning, design, engineering and project management groups, “continued to fundamentally undervalue Wood and its future prospects”.

The proposed offer price of 212p per share valued Wood at £1.47 billion, a 3% premium to Sidara’s initial 205p per share last week. That valued Wood at £1.42bn.

Wood said in a statement today: “On 8 May 2024, the board of Wood announced it had unanimously rejected an unsolicited, preliminary and conditional proposal from Dar Al-Handasah Consultants Shair and Partners Holdings Ltd ("Sidara"), regarding a possible cash offer to acquire the entire issued and to be issued ordinary share capital of Wood.

“On 14 May 2024 Sidara submitted a further proposal for a cash offer to the board, which proposed an offer price of 212p per Wood share, representing an increase of approximately 3% to the initial proposal.

“The board carefully considered the latest proposal, together with its financial advisers, and concluded that it continued to fundamentally undervalue Wood and its future prospects. Accordingly, the board unanimously rejected the latest proposal on 15 May 2024. There can be no certainty either that an offer will be made or as to the terms on which any offer might be made. Further announcements will be made as appropriate."

Sidara now has until 5pm on June 5 to announce a firm intention to make an offer for Wood under the city takeover code, or walk away.

Sidara, which has around 20,000 employees across 60 countries, generates nearly half of its revenues in North America.

Danni Hewson, head of financial analysis at AJ Bell, declared that Sidara “will have to dig deeper if it’s going to win over a board that understands the fundamental value of the business and realises what’s on the table is still insultingly low”.

Ms Hewson added: “John Wood is an old school engineering business that’s pivoting to be at the forefront of the transition to renewables. It’s taken its sweet time to get there and that glacial movement stirred up activist investors, but sometimes it’s better not to grab the bird in hand and realise that what’s in the bush is worth exploring further.”

Wood was the subject of five takeover proposals from US private equity group Apollo last year. Apollo had been prepared to pay £1.7bn for Wood but ultimately walked away from the bidding process.

Wood employs around 4,500 people in Aberdeen and its North Sea operations. It has a 35,000-strong global workforce.

Shares in Wood closed down 15p, or 7.5%, lower at 185.6p