ZUG, Switzerland–(BUSINESS WIRE)–Jan. 13, 2014– Foster Wheeler AG (Nasdaq:FWLT) (“Foster Wheeler” or the “Company”) today confirmed that, following a comprehensive review of strategic alternatives, it has provisionally agreed with AMEC plc (“AMEC”) on non-binding outline terms concerning a possible business combination of the Company and AMEC. While the Company does not generally comment on pending negotiations, today’s confirmation is in response to the recent announcement by AMEC.
The Company and AMEC have negotiated non-binding terms of a business combination pursuant to which AMEC would acquire each outstanding share of Foster Wheeler common stock for transaction consideration consisting of 0.8998 shares of AMEC common stock and$16.00 in cash. In addition, assuming binding terms are agreed, the Company expects to pay a one-time dividend of $0.40 per share prior to closing.
Based on AMEC’s stock price of £10.79 per share (the close of trading on Friday, January 10, 2014) and an exchange rate of £/$1.648, the proposed transaction would value each Foster Wheeler share at approximately $32.40 and the fully diluted share capital of Foster Wheeler at approximately $3.3 billion (taking into account the proposed $0.40 dividend by the Company). This represents a premium of approximately 12.8% to $28.73, the Company’s closing stock price on November 26, 2013, the trading day prior to initial public reports about a potential business combination involving the Company and AMEC, and a premium of approximately 19.4% to the 3-month volume weighted average price (measured for the three-months ending on November 26) of approximately $27.15.
The Company believes that the meaningful equity component of the proposed terms would allow its shareholders to participate in the strategic and commercial benefits of the combined company, including significant potential synergies. Under the proposed terms, Foster Wheeler’s existing shareholders would own approximately 23% of the combined company, and it is expected that two members of the Company’s board would join the board of directors of AMEC as non-executive directors.
In connection with their negotiations, Foster Wheeler has agreed with AMEC not to solicit alternative proposals through February 22, 2014.
Other than with respect to non-solicitation of alternative proposals, no binding agreement has been entered into between the Company andAMEC with respect to any business combination, and the execution of definitive agreements with respect thereto is subject to mutual agreement of definitive terms, mutual due diligence and approval by each of the Company’s and AMEC’s board of directors, among other things. Accordingly, readers are cautioned that there can be no assurances that any transaction will ultimately be agreed between Foster Wheeler and AMEC, or what the definitive and binding terms of any such transaction would be.
Foster Wheeler does not intend to make any further comment or announcement, or disclose further developments, regarding this process unless and until discussions with AMEC have concluded, or where such further disclosure is appropriate or required.
Foster Wheeler is being advised by Goldman, Sachs & Co. and J.P. Morgan Securities LLC, as financial advisors, and Freshfields Bruckhaus Deringer LLP as legal advisors, in connection with the review of strategic alternatives and its discussions with AMEC.
Foster Wheeler is a global engineering and construction company and power equipment supplier delivering technically advanced, reliable facilities and equipment. The Company employs approximately 13,000 talented professionals with specialized expertise dedicated to serving its clients through one of its two primary business groups. The Company’s Global Engineering and Construction Group designs and constructs leading-edge processing facilities for the upstream oil and gas, LNG and gas-to-liquids, refining, chemicals and petrochemicals, power, minerals and metals, environmental, pharmaceuticals, biotechnology and healthcare industries. The Company’s Global Power Group is a world leader in combustion and steam generation technology that designs, manufactures and erects steam generating and auxiliary equipment for power stations and industrial facilities and also provides a wide range of aftermarket services. The Company is based in Zug, Switzerland, and its operational headquarters office is in Reading, United Kingdom. For more information about Foster Wheeler, please visit our Web site at www.fwc.com.