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Major investors speak out against takeover of Aveva by Schneider Electric

Opposition: Schneider has offered £31 a share for the 40 per cent of Aveva it doesn't already own

Major investors speak out against £9.5bn takeover of Aveva by French conglomerate Schneider Electric as opposition mounts

Major investors have spoken out against French conglomerate Schneider Electric’s £9.5bn takeover of Aveva as opposition mounts.

Canada-based Mawer Investment Management has attacked the deal as “opportunistic”, adding that the software company has excellent long-term growth prospects.

Schneider this week offered £31 a share for the 40 percent of Aveva it doesn’t already own, a 41 percent premium over the share’s closing price in August when the offer first surfaced.

But it was well below the share price of £42 a year ago. Peter Lampert, Mawer’s fund manager, said: ‘Aveva is a great business with a very promising long-term outlook.

“It is an opportunistic offer that takes advantage of the weakness of the share price in recent months.”

Another top 20 investor, who did not want to be named, added: “We do not believe the offering fairly reflects the future value creation potential of the business.”

His comments echo those made by M&G as momentum against the deal grows. Rory Alexander, fund manager at M&G Investments, said: “Aveva share price is trading at depressed levels due to a combination of low technology valuations, macroeconomic uncertainties and a complex evolution of the business model from license to revenue based. in subscriptions. M&G intends to vote against the offer.’ The takeover is the latest example of foreign buyers, including private equity, plundering the London stock market as the pound falls.

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New Business Secretary Jacob Rees-Mogg has come under increasing pressure to intervene in the Aveva deal on national security grounds.

In particular, fears have been raised about Schneider’s joint venture with Chinese conglomerate Delixi Electric. Critics say that if Aveva takes over its proprietary technology, it risks falling into Chinese hands.

But Rees-Mogg could face Foreign Minister Kwasi Kwarteng, who is increasingly seeking to deregulate the city to unleash a ‘Big Bang 2.0’.

This could mean forgoing more merger and acquisition deals in a bid to show that Britain is open to business and much-needed foreign investment.

Aveva is one of the few technology companies left on the London Stock Exchange.

It provides software to help engineers design large industrial projects, as well as products that help run factories.

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Schneider expects to close the deal in the first quarter of 2023, but will need to win the support of at least 75 percent of minority shareholders in a vote scheduled for mid-November. Since the French group cannot vote, it would only take 10 per cent of the shareholder base to reject it to block the deal.

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