Invensys stock climbs on bid reports as group heads for forecast profit drop
INVENSYS shares were boosted by five per cent yesterday following reports this weekend that potential bidders are circling the engineering company.
Siemens, General Electric, ABB and Emerson were said to have approached Invensys within the past few weeks in a sign that interest in the FTSE 250 company is intensifying.
Analysts were divided over the likelihood of an imminent offer for Invensys, as the rumour has been circulating for years.
“These things come around again and again,” one analyst told City A.M.
But another analyst said the situation has changed in the wake of Invensys’ profit warning in January, which forecast a £60m hit to operating profits.
The stock, which plunged by over a quarter immediately after the warning and has yet to recover fully, could dive further if Invensys’ full year results disappoint investors this Thursday, bringing a potential offer price down and prompting interested buyers to swoop in.
Invensys, which makes controlling and signalling equipment for railways, needs to entice a large conglomerate that can take on all of its operations, or break up its divisions. But the latter could be tricky without offloading its £4.2bn pension scheme, plans for which failed last summer when costs soared to around £1.7bn.