Major investors speak out against French conglomerate Schneider Electric’s takeover of Aveva for £9.5bn as opposition mounts
Major investors have spoken out against the takeover of Aveva by French conglomerate Schneider Electric for £9.5billion as opposition mounts.
Canadian firm Mawer Investment Management called the deal “opportunistic”, adding that the software maker has excellent long-term growth prospects.
Schneider this week offered £31 per share for the 40% of Aveva he does not already own – a 41% premium to the closing price in August when the offer first appeared.
Opposition: Schneider has offered £31 a share for the 40% of Aveva he doesn’t already own
But it was well below the share price of £42 a year ago. Peter Lampert, fund manager at Mawer, said: “Aveva is a great company with very promising long-term prospects.
“It’s an opportunistic offer that takes advantage of the weakness in the share price in recent months.”
Another top 20 investor, who did not want to be named, added: “We do not believe the offer accurately reflects the company’s future value creation potential.”
Their comments echo those of M&G as the momentum against the deal builds. Rory Alexander, fund manager at M&G Investments, said: “Aveva’s share price is trading at depressed levels due to a combination of low technology valuations, macro uncertainties and complex market developments. business model from licenses to subscription-based revenue. M&G intends to vote against the offer.’ The takeover is the latest example of overseas buyers, including private equity, plundering the London stock market as the pound plummets.
New business secretary Jacob Rees-Mogg is under increasing pressure to intervene in the Aveva deal on national security grounds.
In particular, fears have been expressed about Schneider’s joint venture with Chinese conglomerate Delixi Electric. Critics say that if Aveva is taken over, its proprietary technology risks falling into Chinese hands.
But Rees-Mogg could come up against Chancellor Kwasi Kwarteng, who is increasingly seeking to deregulate the City to trigger a ‘Big Bang 2.0’.
That could mean forgoing more merger and acquisition deals in a bid to show Britain is open for much-needed foreign business and investment.
Aveva is one of the few remaining technology companies on the London Stock Exchange.
It provides software to help engineers design large industrial projects as well as products that help run factories.
Schneider hopes to complete the deal in the first quarter of 2023, but will need to secure the support of at least 75% of minority shareholders in a vote expected in mid-November. The French group not being able to vote, it would be enough for 10% of the shareholding to reject it so that the operation is blocked.