Schneider Electric, Aveva terminate talks again

Schneider Electric declined to comment on the end of the talks on Wednesday.

Shares were suspended on Monday after it said it had rekindled merger discussions with French industrial group Schneider Electric, after the pair abandoned talks back in December.

Shares in Cambridge-based engineering software developer Schneider Electric plunged 14.3 per cent this morning, after it admitted it had ended takeover talks after just two days.

It is the second time in under six months that talks between the parties have ended in failure.

JP Morgan analyst Stacy Pollard said of the collapse in talks on Wednesday: “If we had to guess, we would say Schneider lowered the price between July and December of a year ago, and then Schneider came back this week with a similar price thinking it would look relatively better now that Aveva’s financial forecasts have been reduced by 9-15 percent”.

In exchange, Aveva would have got cash from Schneider.

However, George O’Connor, an analyst at Panmure Gordon, a British stockbroker and investment bank opined, “Discussions collapsing for a second time tells us that there will not be a third chance”.

It is no secret that Longdon has steered a strategy of diversifying the group’s products and services to minimise the risk of dependancy on oil & gas, given macro-economic circumstances. “Aveva is left to its own devices – and the structural weaknesses in the firm’s business model, as highlighted by this deal, remain unaddressed”. The 52 week high for the share price is 2350 while the 52 week low for the stock is 1221.