AMEC Foster Wheeler plc (NYSE: AMFW) saw its shares suffer Wednesday afternoon, after the company confirmed it has been informed by the United Kingdom’s Serious Fraud Office that the latter has opened an investigation into a merger.
Moreover, experts have described AMFW stock as entering into oversold territory. They define oversold territory using the Relative Strength Index, or RSI, which is a technical analysis indicator used to measure momentum on a scale of zero to 100. A stock is considered to be oversold if the RSI reading falls below 30. In the case of AMEC Foster Wheeler PLC, the RSI reading has hit 29.8
AMFW has been swept up in the SFO’s wide-ranging criminal probe into Unaoil, a Monaco-based energy consultancy, disclosing on Tuesday evening that it is now under investigation by the anti-corruption watchdog.
The oil services company, which is working towards a £2.2-billion takeover by its bigger rival Wood Group, said it had been informed by the SFO of its investigation into the group, “predecessor companies and associated persons in respect of the Foster Wheeler business” focusing on the past use of third parties and possible bribery and corruption and related offences.
In June, Wood Group's stakeholders approved the merger, and the takeover is expected to complete in the fourth quarter this year.
The SFO opened an investigation into Amec Foster Wheeler, predecessor companies and associated persons in respect of the Foster Wheeler business yesterday.
AMFW shares, meanwhile, shed 15 cents, or 2.7%, Wednesday to $5.49.
