James Moore: Some red faces at Invensys – but that's all

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The Independent Online

Outlook: Oh dear. It seems that Invensys, the metal basher, has engineered a rather large cock up. On Wednesday, in response to reports of a possible takeover, the company haughtily declared that it didn't comment on "market rumours" despite the shares closing up by more than a quarter.

Except the "rumours" it huffed and puffed about contained a fair amount of truth. Just enough, in fact, to create a false market in the company's shares. They slid dramatically yesterday after the company admitted it had (as reported) received an approach from US suitor Emerson Electric. It's just nothing came of it. The same rumour led to a 10 per cent rise in shares a couple of months ago but drew the same no comment.

It was only on Tuesday that the Financial Services Authority (FSA) admitted there were suspicious price movements ahead of one in five deals involving listed companies. This rather gave the impression that the City of London's markets aren't quite as clean as its advocates would have us believe.

Ah, said the FSA, but not all price movements are down to crookery. Some, for example, are down to the press getting word of deals before they are announced. What it didn't say is that some are also down to companies and their advisers handling the latter situations badly.

Perhaps we shouldn't be surprised at the involvement of Invensys in one of these situations, though. January's profit warning suggested it's not just corporate communications that are being handled badly.

Still, having neatly proved the FSA's point for it, the company (and its adviser J P Morgan Cazenove) can rest easy because it means there are unlikely to be any serious consequences beyond a few red faces and rapped knuckles.

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