So will all this on-again, off-again attention be the catalyst for a new offer? If another player does step into the ring, Emerson can reopen negotiations as well, but otherwise must wait another six months to keep the regulators happy. Invensys may hope that its taciturn wrongfooting of the markets ends up creating a healthy bidding war for the industrial power systems specialist. Those who were fooled by its silence earlier this week will be distinctly unimpressed with the firm and its adviser JPMorgan Cazenove.
Meanwhile the £56bn Glencore-Xstrata tie-up looks increasingly rocky. The mining firm and the commodities trader might seem made for each other, but the non-Glencore shareholders of Xstrata will have the final say on 12 July. Their reservations at the price have begun to pale against their objection to the accompanying pay deal, intended to lock in senior staff for the first few years of the joint venture. Yesterday the Association of British Insurers (ABI) agreed, assigning a red top warning to the pay deal, something only assigned to around 10 per cent of cases. The governance body doesn’t officially provide voting advice, and remains neutral on the deal itself, but its intervention can only add fuel to the fire.
It’s not as if the situation wasn’t already looking bad. Because Glencore owns 34 per cent of Xstrata but is not allowed to vote on the merger or the accompanying pay deal, the number of shareholders able to scupper the whole thing is uncomfortably small. While it will take 25 per cent of eligible voters to veto the takeover, that would only need owners of 17 per cent of Xstrata’s shares to band together. The pay deal might seem less of a worry: that would require 33 per cent of Xstrata shareholders to dissent. The problem is, Xstrata has already suffered a 40 per cent shareholder rebellion against its remuneration plan on 1 May. As a non-negotiable part of the merger, this must be passed or it all falls through. Will Xstrata’s owners really vote down their payday over a pair of golden handcuffs? The numbers certainly don’t look promising.
Marc Sidwell is City A.M.’s managing editor.