Invensys (ISYS), the Investors Chronicle’s takeover tip of the year, has received a big money approach from Schneider Electric just days after we highlighted again that a deal could be done. But shares in the provider of software and controls to power stations and oil refineries have already raced past the indicative offer price of 505p, suggesting the City anticipates a bidding war which could take them even higher.
Schneider’s indicative offer is worth 319p in cash and 186p of Schneider shares, and values Invensys at £3.3bn. The British company has already said it will likely recommend the deal if the French power equipment maker firms up the offer, which it probably will. Schneider believes the strategic and financial rationale is “compelling,” giving it greater access to industry automation, energy management and a fast-growing software business. There’ll be huge cost savings, too, and talks have already progressed to the fine detail and due diligence.