French buyer defends £10bn takeover of British software giant Aveva

The French buyers of British software giant Aveva have defended the deal after a backlash.

Schneider Electric chief executive Jean-Pascal Tricoire denied buying it cheaply, saying his company paid a “very rich bounty” for the Cambridge company.

He also dismissed fears about Schneider’s ties to China and insisted he was committed to protecting jobs.

But the comments drew criticism from leading City fund manager Richard Buxton, who opposed the deal at the time, saying last night that Schneider had probably “done very well” given the price it paid.

Company Secretary Grant Shapps waved off Schneider’s acquisition of the 41 percent of Aveva it didn’t already own last month in a deal that valued it at £10bn.

The deal was approved by investors in November, despite concerns by some that Schneider was underpaying.

But Tricoire, told the Mail at the World Economic Forum in Davos, “It’s a publicly traded company and we paid a very high premium.”

Schneider had agreed last September to buy the stake for £31 per share, a 40 per cent premium over the price Aveva was trading at before its stake became known.

Subsequently, the price was further softened to £32.25, a 47 per cent premium, to assuage investor anxiety.

Asked about the company’s commitment to jobs and its future in the UK, Tricoire said: ‘We’ve committed to all of this in our official communications from day one.

We are committed to preserving know-how, IP [intellectual property] and people.’ In the acquisition deal, Schneider said it intends to keep Aveva’s headquarters in Cambridge, develop its research and development in the UK and support existing plans to boost its business in the city.

Another point of concern was the joint venture Schneider has had since 2007 with the Chinese conglomerate Delixi Electric.

That had raised fears that Aveva’s proprietary technology was at risk from Beijing.

Some politicians and analysts wanted the deal reviewed under the National Security and Investment Act for this reason.

Tricoire said, “Most of what we do in China is 100 percent Schneider. Aveva’s digital branch operates independently in China.’

The implication of his comments seemed to be that little would change with regard to China.

Aveva, which provides software to help engineers design major industrial projects and products to help factories run, was founded in 1967 and has been a pioneer in industrial design technologies ever since.

This week, CEO Peter Herweck insisted it would remain autonomous as the deal was formally completed. Several major investors had threatened to reject the earlier offer, including hedge fund Davidson Kempner.

Even after the deal was approved, the New York company said it was “highly opportunistic” and said it failed to consider long-term potential. Herweck said: ‘The independent council reviewed the offer, talked to several independent advisers who did evaluations and so they supported the first offer.

“If shareholders are not happy, they naturally express their displeasure and that is why a revised offer was made, which was largely accepted by the shareholders.”

Buxton, investment manager at Jupiter Asset Management, expressed skepticism last night about Schneider paying a high premium. “I think if the company performs the way they’d like, they’ll have done really well three years from now.”