Aveva Investors To Reject ‘Opportunistic’ Schneider Takeover Bid

Two major investors in Cambridge-based engineering software firm Aveva said they planned to reject a £9.5 billion takeover bid announced last week by France’s Schneider, with both calling the offer “opportunistic”.

Schneider last week said it would proceed with a full takeover of Aveva, of which it already owns 60 percent under a deal agreed in 2017, paying £31 per share, a 41 percent premium over the company’s August closing price before the potential offer emerged.

But Canada’s Mawer Investment Management said the offer did not reflect the long-term potential of Aveva and instead took advantage of recent and temporary share price weakness.

‘Disappointed’

Mawer is one of the top five external shareholders in Aveva.

Peter Lampert, portfolio manager at Mawer, expressed the company’s views first to the Financial Times and later made similar comments to other news agencies.

“As long-term investors, we are willing to be patient and expect the market should better reflect the value of the business over time,” Lampert told Reuters.

UK-based M&G Investments, another major Aveva shareholder, similarly said it was “disappointed” with the offer.

Challenging economy

“M&G is materially underwhelmed with the opportunistic 31-pound offer from Schneider for the remainder of Aveva, and we’re disappointed that the Aveva board has recommended the bid to shareholders,” said M&G fund manager Rory Alexander.

“M&G intends to vote against the bid in the belief that patience will be rewarded well in excess of what Schneider is offering.”

Schneider has said it believes the offer is fair and reflects challenging economic conditions.

The board of Aveva has recommended the offer to shareholders, with chair Phililp Aiken saying it represents “attractive, certain cash value”.

Shareholder vote

Schneider must secure the approval of at least 75 percent of minority shareholders for the deal to go through, in a vote scheduled for mid-November.

Analysts Berenberg said in a note that the offer was lower than the £32-£37 per share range expected and that it “does not fully reflect Aveva’s true potential”, but said they expected many shareholders would approve it.

Jeffries said it also expected the deal to go through and added that Schneider was “the only possible buyer given it is already the majority shareholder”.