Schneider Keeps Eyes Peeled for $5 Billion Invensys Takeover
July 15, 2013
Schneider Electric Offers a 15% Higher Closing Share Price, Invensys Says They May Accept
Word on the street is that low- and medium-voltage equipment manufacturer Schneider Electric has its eye on Britain's Invensys PLC for a potential 3.3 billion-pound ($5 billion) takeover. The acquisition would allow Schneider to add industrial software and control systems.
According to a recent report from Bloomberg, France's Schneider is offering to pay 505 pence a share, comprising 319 pence in cash and 186 pence in new shares. Schneider proposed a share price 15% higher than the closing share price was on July 11. Invensys said they are leaning towards accepting the proposed offer, but Schneider says it is too early in discussion to be sure.
On July 12, Invensys shares rose to a high of 513.50 pence, showing signs other investors could be making a counter offer. Emerson Electric made a buy out offer in 2012, but according to Royal Bank of Canada, other potential buyers may include General Electric and ABB.
"Emerson is perhaps better placed than Schneider to offer a higher bid given the greater synergy potential, which we estimate at 5% of sales versus 4% at Schneider," said Alasdair Leslie, analyst for Societe Generale. "Invensys remains a highly prized asset for Emerson, given the size of its process automation offerings and a "highly complementary" product portfolio."
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