Invensys shares soar on takeover talk
SHARES in British engineering giant Invensys hit a 10-year high yesterday after the company said it had received a £3.3bn (€3.8bn) takeover offer from France's Schneider Electric.
Invensys said Schneider was considering an offer of 505 pence a share in cash and stock.
Shares jumped as high as 513.5 pence on speculation that the proposal could flush out other bidders. US group Emerson Electric was in talks to buy Invensys a year ago.
If a bid battle for Invensys breaks out, the share price could go even higher, said Neil Veitch, a fund manager at SVM Asset Management, which holds Invensys stock.
Shares in Schneider were down 3.9 pc at €55.81 each after the news broke, on concerns it could get sucked into an expensive bid battle. The cost of insuring its debt against default jumped on expectations it would raise new debt to fund a deal.
"Schneider is finishing its due diligence. There is a deal, there is a handshake," a source familiar with the matter said.
He expects Emerson to look at Invensys because there were few companies like it available to buy. But Emerson could be put off by the price. (Reuters)