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Amec Raises Dividend as It Makes Firm Bid for Foster Wheeler

Feb. 13 (Bloomberg) -- Amec Plc, the second-biggest U.K. oil and gas engineer, increased its dividend for the sixth year in a row as it forecast “good” revenue growth this year.

Amec is proposing to raise the dividend by 15 percent to 42 pence a share on its “continued confidence in the outlook and reflecting our strong cash generation,” the London-based company said today in a statement. It reported a record order book of 4.1 billion pounds ($6.8 billion) in 2013 compared with 3.6 billion a year earlier on “strong performance” in the U.K. North Sea and in the Middle East.

Amec reported pre-tax profit of 255 million pounds, little changed from a year earlier. It withdrew from conventional power activities in the U.K. on widening losses.

Amec shares fell 1.1 percent to 1,080 pence at the close in London trading, valuing the company at 3.2 billion pounds.

Amec also said today it’s making a firm offer for U.S.- traded Foster Wheeler AG for $3.3 billion in cash and shares, with the transaction expected to close in the second half. Separately, Foster Wheeler said it will pay a one-time dividend of 40 cents a share prior to closing of the offer.

The transaction, which is expected to bring “double-digit” earnings growth in the first 12 months, will boost capacity in the oil products and petrochemicals business at Amec, currently focused on helping companies get oil and gas out of the ground. Foster Wheeler has worldwide operations and has been working in Saudi Arabia and the United Arab Emirates since the 1970s, according to its website. The Zug, Switzerland-based company has a market value of $3.1 billion.

The combined group will have revenue of 6.2 billion pounds, Amec’s Chief Executive Officer Samir Brikho said in a webcast on the company’s website.

Amec hired Barclays Plc, Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi and Royal Bank of Scotland Group Plc to underwrite debt for the takeover. Foster Wheeler was advised by Goldman Sachs Group Inc. and JP Morgan Chase & Co.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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