Aveva share price plunges as it ends takeover talks with Schneider Electric - after two days

 
Emma Haslett
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The two sides had previously been in talks (Source: Getty)

Shares in Cambridge-based engineering software developer Aveva plunged 14.3 per cent this morning, after it admitted it had ended takeover talks after just two days.

Shares were suspended on Monday after it said it had rekindled merger discussions with French industrial group Schneider Electric, after the pair abandoned talks back in December.

But its share price fell to 1,589p this morning, after Aveva issued a statement saying it had asked for shares to continue trading following the termination of preliminary discussions.

Should Aveva have known something like this would happen? In December shares fell more than 36 per cent after it said a merger with Schneider would create "significant [challenges] which could not be overcome without considerable additional risk and cost".

The two businesses had originally unveiled plans to merge back in the summer, with Schneider agreeing to pay £550m for a 53.5 per cent stake in the combined business, giving shareholders the equivalent of £26 a share.

Last month Aveva boss Richard Longdon said "lessons have been learned" from the talks.

“It's hard to see us trying to do a deal with such a high level of complexity again, though we are actively looking to make smaller scale acquisitions that will help grow our portfolio."

On Monday, the two businesses trod carefully.

"There can be no certainty that the discussions between Aveva and Schneider Electric will lead to any agreement concerning the possible combination... and there can be no assurance that, even if reached, any such agreement would be completed," it said. Looks like that cautious tone was sensible....

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