After selling its slow-growing rail business to Siemens for an eye-watering £1.7bn, Invensys (ISYS) is in great shape and talk of a knockout bid for what's left of the engineering group is being taken seriously.
There's certainly excitement in the air. US activist hedge fund ValueAct Capital has been quietly stake-building and now owns more than 8 per cent of Invensys, making it the second-largest shareholder behind M&G. We know nothing of its plans, but clearly the Americans are chasing big profits. They may not have long to wait if rumours of interest from Schneider Electric are well founded. Invensys, now focused on industrial software and control equipment, looks a good fit for the French company.
Analysts at Societe Generale are converted. With the pension issue no longer a deal-breaker, they reckon a potential buyer may cough up at least 460p a share before Invensys starts spending its huge cash pile.