MPs tell Shapps to block Aveva deal
As French raider wins vote for UK tech champion...
GRANT Shapps is under intense pressure to intervene in Schneider electric’s contentious takeover of Uk tech champion aveva as security concerns mount.
French company Schneider won a crunch vote yesterday on its £10bn buyout of the Cambridge-based firm, overcoming opposition from major shareholders.
It was rejected by 16.5pc of independent investors in aveva, but crossed the 75pc threshold needed for approval.
Schneider will now snap up the 41pc of the company that it does not already own, for 3225p a share.
The deal takes aveva off the london Stock exchange (LSE) in a blow to the Uk’s credibility as a hub for innovative tech firms.
But the takeover has caused concern in political circles with high-profile MPs urging Business Secretary Shapps to intervene over the French company’s links to China.
Schneider has had a joint venture with Chinese conglomerate Delixi electric since 2007, raising fears among critics that aveva’s proprietary technology is at risk of falling into Chinese hands.
Former tory leader Sir Iain Duncan Smith called for a review into the joint venture deal under the national Security and Investment act.
He said: ‘Wherever there is Chinese involvement, the Government should hold a review.
‘As China is increasingly a threat, we need to review anything that looks like there is Chinese involvement in it.’
Russ Shaw, founder of tech london advocates, echoed those concerns and said every foreign takeover of a Uk company ‘needs some evaluation’.
He added: ‘From a national security and investment point of view, I think there is a certain criteria every overseas transaction has to meet.
‘There should definitely be an evaluation, though given their track record I suspect it would be a very straightforward one.’
Calls for a review come just a week after Shapps spectacularly blocked the Chinese takeover of Britain’s biggest microchip maker newport Wafer Fab over security concerns.
The Government used its powers under the national Security and Investment act to order Nexperia to reduce its stake in Britain’s largest microchip maker by 86pc.
Schneider will now notify the Government of the takeover as company figures believe it falls within the scope of the act.
It will also face a final court hearing in the first few months of next year, after which the deal is expected to conclude.
Conservative MP tobias ellwood, chairman of Parliament’s defence committee, said: ‘aveva is clearly a Uk success story in an industry of the future.
‘I would expect the Government to look at this transaction very closely to assess the implications to national security.
‘The national Security and Investment act came onto the statute book for a purpose and it should be utilised as such.’
Spun out of Cambridge University in the 1960s, aveva provides software that helps engineers to design major industrial projects, as well as products that help to run factories.
Chancellor of the exchequer Jeremy Hunt has promised to turn the Uk into the ‘world’s next Silicon Valley’ by combining the country’s science and technology prowess with its ‘ formidable financial services’.
But london has struggled to attract leading tech firms despite repeated efforts by tory governments over the past decade.
It suffered a blow earlier this year when chip maker arm snubbed the capital in favour of a listing in new York.
Shaw added that ‘it is a shame’ to lose aveva from the london stock market, as it is a ‘significant company’.
It marks the departure of one of the LSE’s few remaining tech companies, and leaves Darktrace and Sage as the only remaining major players.
Virus protection firm avast left this year after a £7bn merger with Nort on life lock.
Micro Focus International is being snapped up by Canadian software firm open text.
Aveva said it was ‘pleased’ that the deal had been approved.
Schneider’s offer was a 41pc premium to aveva’s share price on august 23, when news of a possible bid was first reported.