Schneider in denial of Tyco bid rumours

aSCHNEIDER Electric continued to deny rumours yesterday that it was in discussions to purchase Tyco International, despite contrary reports.

The French-based energy management group was said to have made a preliminary bid for approximately $30bn (£18.46bn) for the Switzerland-based security agency, but Schneider quickly refuted the reports.

“In response to market rumours, Schneider Electric announced today that it is not currently in discussion with Tyco International regarding a potential strategic transaction between the two companies,” the company said in a statement.

“Schneider has made a number of acquisitions to boost its growth, but this rumoured bid is a surprise due to the size of the target.

“This would be huge compared to Schneider’s size,” said Bertrand Lamielle, head of asset management at B*Capital.

Tyco had £10.4bn in revenue in 2010, almost two thirds of Schneider’s £17.8bn revenue.

Shares in Schneider have fallen over eight per cent this week on concerns about a capital hike, and are down 10 per cent since early April.

Analysts from Morgan Stanley estimate a deal would require up to $17.2bn of fresh equity, suggesting it could also prompt Europe’s biggest-ever non-financial share issue.

Shares in Tyco, which has a market capitalisation of about $23bn – almost two thirds that of Schneider – were more or less flat in Paris trading.