Vote to keep Aveva in the UK: Cambridge software champion can help turn Britain into a global tech powerhouse, says ALEX BRUMMER
Minority investors in Aveva, the Cambridge born and bred champion of industrial software worth £10bn, have a rare chance this week to win one for Britain.
France’s Schneider Electric is seeking to buy 41 percent of the shares it does not own in Aveva through a scheme arrangement that requires the consent of 75 percent of minority investors.
Several of the top 20 investors, including M&G, are already lukewarm about the transaction and just 10 percent of the share book could drive Schneider off the battlefield.
Takeover bid: France’s Schneider Electric seeks to buy 41% of the shares it does not own in industrial software developer Aveva, but needs the consent of 75% of minority investors
Most of the objections to Schneider’s offer have been related to price. M&G describes the offer as “opportunistic.”
Earlier this month, Schneider improved its offer by 4 per cent to £32.25 per share. It is unclear whether this will see the £68bn French giant cross the finish line when the votes are counted on Friday.
As Rishi Sunak’s government seeks to reboot the UK as Europe’s Silicon Valley, taking advantage of the country’s great research universities and leadership in software and technologies such as artificial intelligence (AI), there are good strategic reasons for ministers to step in. .
Among other things, Schneider Electric is deeply involved in China at a time when Western governments are harshly criticizing technology transfer.
German authorities recently rejected two Chinese offers for local tech companies.
Last week, Britain used new powers, granted under the Investment and National Security Act, to block the takeover of Newport Wafer Fab by the Chinese-controlled Dutch company Nexperia.
Schneider does not hide his desire to increase his participation in the People’s Republic. Yin Zheng, President of Schneider Electric China, is quoted by the Global Times (the English branch of the People’s Daily) as to the huge market potential of ‘decarbonization and digitalization’.
As a leading UK industrialist told me recently, China’s main reason for joint ventures, or taking over Western companies, is to gain access to proprietary technology.
The UK high-tech, engineering and aerospace sector is being seriously stripped by overseas acquisitions. Such deals are not only a danger to R&D and intellectual property, but also a threat to London as a financial sector.
Data compiled by Bloomberg suggests that the Paris Stock Exchange has already surpassed the London Stock Exchange in scale.
Numbers can be challenged. But fund manager Schroders says foreign acquisitions and private equity are diminishing investment opportunities in the FTSE 350.
Schneider argues that Aveva is no longer the Cambridge-based entity it once was. It has been transformed by the injection of Schneider’s software arm and the £4.2bn 2020 purchase of US competitor OSIsoft.
Even if France can live with the prospect of China gaining access to smart industrial software, it’s hard to think the US would be so comfortable.
Schneider’s revised offer failed to garner support from minority investors. If necessary, you can come back with an open offer instead of a settlement outline, possibly at a higher price. Whatever the price, there are good strategic reasons for this deal to be stopped in its tracks.
Return to Sender
“Come back, all is forgiven,” is the message from Walt Disney’s board of directors to veteran CEO Bob Iger, 71.
But having been unable to arrange the succession in 15 years at the helm, there must be questions as to why he should be able to now.
Iger injected a new creative dynamism into Disney with a series of splashy acquisitions including Pixar Animation, Marvel Entertainment and 20th Century Fox.
However, there is a suspicion that growth under his leadership came at the expense of too much debt and goodwill.
Disney, under the short-lived leadership of ousted boss Bob Chapek, was too slow for streaming and vulnerable to service interruption (unsubscription).
Doing a Steve Jobs and restoring credibility as the global economy slows and purchasing power is cut is a tall order.
The Bank of England’s Jon Cunliffe’s demand to bring the crypto world under the umbrella of regulation seems timely following the implosion of FTX, which collapsed due to its £2.5bn biggest creditors.
Last month’s crisis in liability-driven investing (LDI) used by pension funds was also a consequence of lax surveillance.
The intervention of the authorities now seems to be after the Lord Mayor’s Show.
The rise of shadow banking has been an accident waiting to happen.