AVEVA Surges as Schneider Confirms Considering Buyout
2022.08.24 16:09
Altice USA Inc (NYSE:ATUS)By Geoffrey Smith
Investing.com — Shares in AVEVA (LON:AVV) surged over 32% in London on Wednesday as France’s Schneider Electric (EPA:SCHN) confirmed that it is looking at buying out the software company’s remaining shareholders.
Schneider, which already owns 59% of AVEVA, confirmed a report in the French newspaper Les Echos saying that it “is considering a possible offer for the entire issued, and to be issued, share capital of the Company not currently owned by Schneider Electric.”
AVEVA stock, which has been in a downward trend for nearly a year, shot 32.6% higher by 08:18 ET (12:18 GMT), making good all of its losses since February. Schneider stock, meanwhile, rose 0.8% in Paris.
Buying out the remainder of the U.K.-based industrial software group would cost Schneider around $4.2 billion at current exchange rates, something that appears comfortably within its financial capabilities, given its cash of over $3 billion and long-term debt of only $7 billion. The French group has until September 21st to make up its mind about making a formal offer, under the U.K.’s takeover rules.
AVEVA suffered a small drop in annually recurring revenue in the first half but said that it expects a 15% increase for the full year, due to strong final markets – its core customer base is in the flourishing energy industry – sterling depreciation, and continued growth in its Cloud business.
Schneider’s confirmation comes only a day after the political backdrop for foreign investment in U.K. companies appeared to brighten. BT Group (LON:BT) said it had been informed by the U.K. government that it wouldn’t try to block French telecoms company, Altice (NYSE:ATUS), from raising its stake in the group to 18%. That news also prompted speculation of a full takeover. Schneider had assumed control of AVEVA in 2017 but the terms of that deal effectively stopped it from raising its stake above 75% for at least 18 months.
