French bidder ups Aveva offer to sweeten deal

THE French engineer circling FTSE 100 British software maker Aveva has been forced to sweeten its offer after investors decried the deal as “opportunistic”.

Schneider Electric has made a final offer worth £9.86bn, or £32.25 per share, in a bid to take over one of Britain’s oldest technology companies, with a heritage beginning at Cambridge University in the 1960s.

The French company, which already owns 59pc of Aveva after first investing in 2017, increased its takeover offer after disquiet about the original bid, which was tabled in September.

Earlier this week one of Aveva’s biggest investors called Schneider’s previous £31-a-share offer “highly opportunistic”, arguing it ignored the long-term value of the company.

Davidson Kempner, the hedge fund which owns almost 4pc of Aveva, joined other shareholders such as M&G in saying that the bid was an effort to capitalise on a weak share price.

The company looks like a cheaper target for Schneider in part because of a drop in the value of the pound.

Schneider said it will not increase its latest offer unless another bidder emerges.

Aveva makes software for a range of sectors, from energy and mining to food and drink. The Cambridge-based company has 6,400 employees and is one of the few software or tech businesses in the FTSE 100. Earlier this year, Micro Focus International, one of the few other FTSE tech companies, was snapped up by Canadian suitor Opentext for £5.1bn.

In April Aveva issued a profit warning, saying that the cost of hiring engineers and investing in cloud computing would squeeze its profitability.

It is currently trying to follow in the footsteps of other major software providers, such as Microsoft and Adobe, in moving to a subscription model for its software.

The board of directors for Aveva has approved the offer. “We believe that the acquisition represents attractive, certain cash value,” chairman Philip Aiken said.

Berenberg analysts were expecting an offer in the range of £32 to £37 per share, before the most recent offer was made.

In spite of owning the majority of the company, Schneider needs 75pc of minority investors to wave through the deal, meaning owners of 10pc of the com- pany could block it if they chose to.