Early this morning, it was announced that Schneider Electric's offer of 3.4 billion Euros for Invensys Plc was accepted and recommended by Invensys' board of directors.
The following is the text of the official announcement:
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS OR
PROSPECTUS EQUIVALENT DOCUMENT AND INVESTORS SHOULD NOT SUBSCRIBE FOR
ANY SCHNEIDER ELECTRIC SHARES IN CONNECTION WITH THE OFFER EXCEPT ON THE
BASIS OF INFORMATION IN THE PROSPECTUS WHICH IS PROPOSED TO BE PUBLISHED
BY SCHNEIDER ELECTRIC IN DUE COURSE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
31 July 2013
RECOMMENDED OFFER
for
Invensys plc (“Invensys”)
by
Schneider Electric S.A. (“Schneider Electric”)
Summary
• The boards of Schneider Electric and Invensys are pleased to announce that they have
reached agreement on the terms of a recommended offer pursuant to which Schneider
Electric and/or a wholly-owned subsidiary of Schneider Electric will acquire the entire issued
and to be issued ordinary share capital of Invensys. The Offer is to be effected by means of
a scheme of arrangement of Invensys under Part 26 of the Companies Act.
• Under the terms of the Offer, Invensys Shareholders will be entitled to receive:
For each Invensys Share: 0.025955 New Schneider Electric Shares; and
372 pence in cash.
The Offer represents a value of:
• 502 pence per Invensys Share, or £3.4 billion for the entire issued and to be issued
ordinary share capital of Invensys, based on the closing price per Schneider Electric
Share on 11 July 2013 (being the commencement of the Offer Period) of €58.06 and
an exchange rate on 11 July 2013 of £/€ 1.1592.
Based on the offer value of 502 pence per Invensys Share, the Offer represents a premium
of approximately:
• 14 per cent. to the closing price per Invensys Share of 440 pence on 11 July 2013
(being the commencement of the Offer Period); and
• 27 per cent. to the volume weighted average closing price per Invensys Share of
396 pence in the three months to 11 July 2013 (being the commencement of the
Offer Period).
• The Schneider Electric Board believes that the transaction will generate significant revenue
synergies of approximately €400 million per annum by 2018 as a result of enlarged
offerings, complementary customer bases and additional scale from the integration of
Invensys with Schneider Electric. The estimated impact on EBITA is approximately €65
million per annum by 2018. In addition, the Schneider Electric Board believes that Schneider
Electric will be able to achieve cost savings of approximately €140 million1
per annum by
2016 derived from structural and administrative cost savings, efficiency gains at country and
regional levels and synergies on procurement and production costs. The Schneider Electric
Board expects the transaction to generate tax savings valued at approximately £400 million
(approximately €0.5 billion including approximately €80 million per annum over the first five
years) consisting mainly of utilising tax credits at Invensys. Integration costs relating to the
transaction are estimated at approximately €150 million2
over 2014 and 2015.3
• The Offer will include a Mix and Match Facility, so that Invensys Shareholders will be able to
elect to vary the proportions of cash and New Schneider Electric Shares they receive,
subject to the elections made by other Invensys Shareholders. The Mix and Match Facility
will not change the total number of New Schneider Electric Shares to be issued by
Schneider Electric or the total cash consideration to be paid pursuant to the Offer.
• Following completion of the Offer, Invensys Shareholders will own approximately 3 per cent.
of the Enlarged Group and will be able to participate in the future growth prospects of the
Enlarged Group.
• The Invensys Directors, who have been so advised by Barclays and J.P. Morgan Cazenove,
consider the terms of the Offer to be fair and reasonable. In providing advice to the Invensys
Directors, Barclays and J.P. Morgan Cazenove have taken into account the commercial
assessments of the Invensys Directors. Barclays is providing independent financial advice
to the Invensys Directors for the purposes of Rule 3 of the Code.
• Accordingly, the Invensys Directors intend unanimously to recommend Invensys
Shareholders to vote in favour of the Scheme at the Court Meeting and the resolution(s) to
be proposed at the General Meeting as the Invensys Directors have irrevocably undertaken
to do in respect of their own beneficial holdings of 761,370 Invensys Shares representing, in
aggregate, approximately 0.11619 per cent. of the ordinary share capital of Invensys in
issue on 30 July 2013 (being the latest practicable date prior to this announcement).
• The Offer will be put to Invensys Shareholders at the Court Meeting and at the General
Meeting. In order to become effective, the Scheme must be approvved by a majority in
number of the Invensys Shareholders voting at the Court Meeting, either in person or by
proxy, representing at least three-quarters in value of the Invensys Shares voted at the
Court Meeting. In addition, special resolutions implementing the Scheme and approving the
related Capital Reduction must be passed by Invensys Shareholders representing at least
three-quarters of votes cast at the General Meeting.
• The Offer is also subject to the Conditions and further terms set out in Appendix I to this
announcement including the sanction of the Scheme by the Court, the satisfaction of certain
regulatory conditions (including anti-trust clearances in the EU, the US, Brazil, Canada and
China and CFIUS clearance in the US), the Pensions Condition and admission to trading of
the New Schneider Electric Shares on Euronext Paris (Compartiment A).
The Scheme Document, containing further information about the Offer and notices
convening the Court Meeting and the General Meeting, will be published as soon as
practicable and will be made available by Schneider Electric on its website at
www.schneider-electric.com and by Invensys on its website at www.invensys.com.
• It is expected that the Scheme will become effective by 31 December 2013, subject to the
satisfaction or waiver of the Conditions and certain further terms set out in Appendix I to this
announcement.
Commenting on the Offer, Sir Nigel Rudd, Chairman of Invensys, said:
“Following the recent disposal of Invensys Rail, the agreement with the Pension Trustees
and the re-organisation of the Group, the Invensys Directors believe that Invensys is
strongly positioned to execute on its growth strategy going forward.
However, the Invensys Directors believe that the offer from Schneider Electric represents an
attractive value for Invensys Shareholders and reflects the future growth prospects of the
business and a significant proportion of the benefits which are expected to accrue from the
strong strategic fit between Invensys and Schneider Electric.
Combined with the disposal of Invensys Rail and return of £625 million to shareholders, this
represents a very attractive outcome for Invensys Shareholders. Furthermore, the members
of the Invensys Pension Scheme will benefit from the ongoing support of a significantly
larger, leading, global automation business.”
Commenting on the Offer, Mr Jean-Pascal Tricoire, Chairman of the Board and CEO of Schneider
Electric, said:
“We are delighted to announce the combination of Invensys and Schneider Electric in what
is an exciting day for the stakeholders of both companies. The addition of Invensys'
businesses will considerably strengthen Schneider Electric's overall offering to its industrial
and infrastructure customer base, reinforcing us as a global leader in energy management
solutions integrating power and automation, as well as leading software for customer
efficiency. The transaction will allow Schneider Electric to benefit from increased scale and
realise substantial synergy benefits from the combination. We believe our offer is compelling
to Invensys Shareholders who will realise significant value for their holdings while having the
opportunity to participate in the future strengths of the combined business.
We warmly welcome Invensys' team and believe that the combined business will provide
new and larger growth opportunities for employees and customers as well as offering
Schneider Electric's shareholders significant future value creation.”
This summary should be read in conjunction with, and is subject to, the full text of this
announcement (including its Appendices). The Offer will be subject to the CondThis summary should be read in conjunction with, and is subject to, the full text of this
announcement (including its Appendices). The Offer will be subject to the Conditions and
further terms set out in Appendix I to this announcement and to the full terms and
conditions to be set out in the Scheme Document and the Forms of Proxy.
Appendix II to this announcement contains further details of the sources of information and bases
of calculations set out in this announcement. Appendix III contains a summary of the irrevocable
undertakings received in relation to the Offer. Appendix IV contains details of the arrangements
proposed to be implemented in relation to Invensys Share Schemes together with certain other
matters relating to the retention and incentivisation of key management and employees and
Appendix V contains definitions of certain expressions used in this summary and in this
announcement.
Go here for the entire document in all its legal glory: http://www.invensys.com/isys/docs/offer/Recommended_offer_for_Invensys_plc_by_Schneider_Electric_S.A.pdf
