UPDATE: D.A. Davidson Downgrades Foster Wheeler

In a report published Wednesday, D.A. Davidson analyst John Rogers downgrades Foster Wheeler AG FWLT to Neutral from Buy, dropping its price target to $32.00 from $36.00. According to the report, AMEC recently announced a non-binding agreement that calls for the purchased of FWLT by AMEC plc. Under the terms of the agreement, FWLT shareholders will receive approximately $32.20 per share consisting of 0.8998 shares of AMEC stock (valued at $15.78), $16 per share of cash and a $0.40 per share dividend. The transaction is subject to a definitive agreement and FWLT has agreed not to solicit alternative proposals through Feb. 22, 2014. “The proposed transaction, which appears to be supported by both management teams, represents a very modest premium to recent share prices and is in line with current industry valuation multiples (16x and 8x respective 2014 P/E and EV/EBITDA estimates) and below recent high levels,” the report noted. “Foster Wheeler apparently approached and/or discussed a transaction with a variety of E&C companies and viewed the AMEC proposal as the most attractive opportunity.” FWLT closed Tuesday at $30.90.