The level of publicly stated opposition to attempts by French giant Schneider to buy out the minority shareholders of British software innovator Aveva is unusual.
Despite owning a 59% stake, Schneider, on the advice of Citi, has struggled to secure an offer that values Aveva at just under £10bn.
The French company recognized early on the value of manufacturing software developed in Cambridge written by Aveva, introduced some of its own technology into the business, and supported Aveva’s takeover of US competitor Osisoft.
Derailed: Despite holding a 59% stake, Schneider, on the advice of Citi, has struggled to secure an offer that values Aveva at just under £10bn over the line.
There is a huge difference between a stand-alone FTSE 100-listed company with an independent board of directors and management, and a wholly-owned subsidiary of a French electrical conglomerate. Aveva uses an open architecture for its software (similar to Arm Holdings) and proposes The document indicates that this, as well as continued investment in research and development, will continue.
However, we live in turbulent times, and such commitments are difficult to secure during a global downturn.
Schneider may have effective control over Aveva, but is not in power. All evidence suggests that no matter how important an overseas offshoot of a foreign company is, when it comes down to it and costs need to be cut, a UK subsidiary will be more vulnerable to cuts than a local company.
This is especially true of France, which has erected such high protectionist barriers around its own key industries.
At a time when Chancellor Jeremy Hunt is touting the UK as “the world’s next Silicon Valley”, it’s hard to imagine that this is happening when the UK is so easily getting rid of its jewels.
Again, this is especially true for Aveva, as its software can be vital in advancing its renewable energy program at home and abroad.
The government, which has kicked Huawei out of sensitive parts of the telecommunications network and is seeking to roll out a Chinese-controlled takeover of Newport Wafer Fab, should not feel comfortable with the technology transfer that could come with the new ownership structure.
It used to be that when shareholders speak, there is no going back. This is no longer the case. Despite pledges by American satellite company Viasat not to defenestrate its British rival Inmarsat, the deal ended with an investigation by the Competition and Markets Authority.
The intervention came too late to save many innovative UK mid-market companies, including Cobham and Ultra Electronics, from scrutiny.
Aveva is an important test case for the National Security and Investment Act. This should not be perceived by Schneider as “tidying up” and should not go unnoticed.
A good example of Anglo-French cohabitation is the homemade Kingfisher champions. Owner of B&Q and Screwfix in the UK, and Castorama and Brico across the channel, is an all-season retailer.
During the pandemic, it was picked up by the WFH masses. Chinese-educated CEO Thierry Garnier has quickly mastered the Internet.
After a post-COVID-19 downturn, it is benefiting from the energy impact of the war in Ukraine. Loft insulation sales are up 108% year-on-year, and Screwfix is actively selling thermostatic radiator valves, ahead of the Chancellor’s efforts to get people to cut their energy bills by 15%.
After the Covid boom, Kingfisher shares took a beating and the 2022 earnings cap was cut to £760m from £770m. This is less than the pandemic’s peak profit of around £1bn.
There is still a lot of life in DIY and France is the next stop for Screwfix.
Out of the blue, an unsolicited e-mail arrives from Schroders extolling the virtues of the British Public Private Foundation.
With a share price of 15.3p, the shares are sold at a large discount of 50.5% on the value of the assets. As an owner, I would like the discount to be closed.
But I can’t erase my distaste that in his previous incarnation – as Woodford Patient Capital – the trust was filled by Neil Woodford with assets from his now-liquidated equity earnings core fund as he desperately strove to comply with regulations.
More than three years later, the Financial Conduct Authority still has to let us know what went wrong and who should take the blame.
Credit: www.thisismoney.co.uk /