D-Day for Aveva as French takeover looms: Shareholders cast their votes on the future of UK tech champion
The future of UK tech champion Aveva will be decided today when votes are counted for a controversial takeover by France’s Schneider Electric.
Aveva is one of the few major technology players on the London Stock Exchange along with Darktrace, Sage and Softcat.
It has struck a deal whereby Paris-based Schneider would buy the 41 percent of the company it doesn’t already own, for 3,225 pence a share.
Domestic asset: Aveva is one of the few major tech players on the London Stock Exchange alongside Darktrace, Sage and Softcat
But the deal, which values Aveva at £10bn, is up for grabs and needs shareholder support at a meeting today.
If approved, Aveva will be removed from the market, dealing a blow to the UK’s credibility as a hub of innovative tech companies.
Jeremy Hunt has promised to make the UK the ‘world’s next Silicon Valley’ by combining the country’s scientific and technological prowess with its ‘formidable financial services’.
But the deal would mark an early setback for those plans. London has struggled to attract leading tech firms despite repeated efforts by Conservative governments over the past decade.
The Aveva acquisition requires the approval of at least 75 percent of minority shareholders in tomorrow’s vote.
Since Schneider cannot vote, it would only take 10 percent of the general shareholder base to reject him and block the deal.
Jupiter, M&G Investments, Davidson Kempner and Canadian firm Mawer have publicly stated that they will vote against the deal.
Another top 20 investor has joined them but does not want to be named.
Schneider and Aveva pledged this week in a last-ditch effort to bolster support for the offer as it progresses.
And in a boost to Schneider, Aveva’s main shareholder, Dr. Patrick Kennedy, backed the deal.
Kennedy received a 4.2 percent stake in the business when he bought his company Osisoft, a US rival to Aveva, two years ago.
The deal will see Kennedy earn a £420 million windfall from his stake.
Concerns have also been raised about Schneider’s joint venture with Chinese conglomerate Delixi Electric for security reasons.
Critics say that if Aveva takes over its proprietary technology, it risks falling into Chinese hands.
Growing out of Cambridge University in the 1960s, Aveva provides software to help engineers design major industrial projects, as well as products that help run factories.