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September 23, 2022

Aveva shareholders to oppose £9.5bn Schneider Electric takeover

The company's have agreed a full take-over package, but shareholders fear the engineering software giant is undervalued.

By Matthew Gooding

Engineering software giant Aveva could face shareholder opposition after agreeing to sell its outstanding share capital to Schneider Electric for £9.5bn.

Aveva is set to for a full take-over by Schneider Electric (pic: T.Scheider/Shutterstock)

As reported by Tech Monitor, Aveva and Schneider have been in talks about a full takeover since last month. The French company has owned 60% of Cambridge-based Aveva since 2017, and on Thursday agreed to pay £31 per share to take full control of the company.

The deal is likely to be completed next year, Schneider said. Aveva will continue to operate independently following the takeover, and retain its headquarters.

Shareholders question value Aveva take-over by Schneider Electric

Spun out of the University of Cambridge in 1967, Aveva has become one of the world’s biggest providers of industrial software, predominantly for the oil and gas industries, providing packages which help businesses monitor, maintain and operate complex machinery.

In recent years it has diversified its business into other sectors and in 2020 it spent $5bn acquiring US-based OSIsoft, a provider of cloud-based industrial Internet of Things software, but the war in Ukraine and wider economic problems have hit its profitability, and earlier this year it issued a profit warning for the coming financial year.

This, and the plummeting value of the pound, has led to two major shareholders in Aveva suggesting the £9.5bn price is too low. Peter Lampert, portfolio manager at Mawer Investment management, one of Aveva’s top-five external investors, described the bid as “opportunistic” and said he was “inclined” to vote against it. “Aveva is a great business with a very promising long-term outlook,” he told the FT. “It’s an opportunistic bid taking advantage of share price weakness in recent months.”

Lampert’s views echo those of another significant Aveva shareholder, M&G Investments, which also plans to vote against the deal, the FT reports.

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UK tech companies a target for foreign investors

Aveva is not the only UK tech business in the sights of foreign investors who have been encouraged to make bids by the weak pound.

Enterprise IT giant Micro Focus is set to be taken over by Canadian rival OpenText for $6bn, while digital identity provider GBG is in talks with US private equity fund GCTR about a $1.3bn buy-out.

Speaking to Tech Monitor earlier this month, Russ Shaw, founder of London Tech Advocates and Global Tech Advocates, said Liz Truss’s new government must take action to stem the flow of takeovers, and “develop a world-leading strategy which safeguards UK assets – particularly semiconductors – against foreign acquisition.”

Shaw cited the example of chip production plant Newport Wafer Fab, which was purchased by Chinese-owned Nexperia last year. Business secretary Jacob Rees-Mogg is currently considering whether to block the deal on national security grounds.

Read more: Investors love quantum computing – experts fear a bubble

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