Out of extended auction +13%
Invensys in shock £1.7bn rail sale to Germans
Shares in Invensys, whose rail business is regarded as one of the success stories of the British technology industry, soared 27pc on the news of the deal with the German engineering company.
It surprised analysts after selling the rail division for just £50m less than market value of the entire industrial software company. As part of the deal, Invensys will hand £625m back to shareholders, as well as a further £625m to its own pension fund.
But the sale of a business regarded by some in the City as Invensys’s “crown jewels” raises the prospect of a counter-offer for the unit or even a potential break-up bid for the entire company. It could also raise concerns over the sale of another major British technology business to a foreign owner.
Canada’s Bombardier is seen as a another potential bidder for the Invensys rail business, and interest could also come from Chinese and Japanese rail companies such as China Southern Rail and Hitachi Rail.
General Electric and ABB have also been seen in the past as buyers of the whole company and the sale of the rail unit raises the prospect of a counter-bid for the entire business.