French firm swoops in £3bn Invensys bid

ENGINEERING group Invensys last night announced it has received a £3.3bn takeover bid from French conglomerate Schneider Electric, paving the way for the end of a historic British company.

Invensys, formed in 1999 by the merger of long-running UK manufacturers Siebe and BTR, could now become part of a Paris-headquartered group.

Shareholders in the FTSE 250 firm, which helps to automate technology for everything from oil refineries and power stations to mining companies and appliance manufacturers, are likely to welcome the preliminary offer, which would pay 505p a share with a mix of cash and new Schneider stock.

Yesterday the shares closed at 440.1p, up 60 per cent since last autumn and valuing the firm at £2.87bn.

“The board of Invensys has indicated to Schneider that it is likely to recommend a firm offer at the offer price,” the company said in a statement.

Energy engineer giant Schneider, which has a £25bn market capitalisation, is now required by

8 August to either announce a firm intention to make an offer for Invensys or withdraw.

The offer could bring an end to one of the longest takeover sagas in the City. It would also represent another coup for Invensys chairman and legendary dealmaker Sir Nigel Rudd, who previously helped guide the sale of Alliance Boots to foreign private equity firms and Pilkington to a Japanese company.

Last summer Invensys was forced to admit that takeover talks with US firm Emerson Electric had broken down. It was also linked to American giant General Electric but a substantial pension deficit proved a major sticking point. The company acted fast and in November offloaded its rail division to German giant Siemens for £1.7bn, a move that shocked the markets since the entire Invensys group was valued at just £1.8bn when the deal was announced. Since then the company has used some of the cash to plug its pension deficit and the shares have soared.


JP Morgan Cazenove and Barclays have been advising Invensys and its board on its defence against possible suitors.

The team at JP Morgan has been led by long-term adviser Edmund Byers, with support from Dwayne Lysaghi among others.

The Barclays team has been led by Richard Taylor and Mark Todd.

Advisers spent yesterday deliberating whether to make a public statement about an approach after news of interest leaked into the market.

FTI Consulting is advising Invensys on its financial public relations.

Schneider is being advised on the deal, one of the largest in London so far this year, by Taylor’s former employer Bank of America Merrill Lynch. Its team has been headed by Stephane Courbon in France and Phillip Noblet in London. The group is also being advised by Deutsche Bank.

Bankers last night were not convinced the deal would mark the start of a new wave of M&A.
David Hellier