Margareta Pagano: Invensys investors should be thanking Rudd

Shares in Invensys were still hovering around the 505p price on Friday as investors wait impatiently for France's Schneider Electric to come up with a firm bid offer by the "put-up-or-shut-up" deadline on 8 August.

While there's speculation that rivals such as Emerson Electric or Honeywell may step up to spark a bidding war, it's unlikely they will do so until just before or after Schneider makes its formal cash and share offer worth 505p, valuing Invensys at £3.3bn.

So it's no surprise that Invensys hasn't had any other approaches and explains why some of the more active funds, such as Value Active, were heavy sellers of the stock last week when the price was above Schneider's informal offer. Even so, the M&A experts reckon the shares can go to 550p a share if there is a bidding war.

Indeed, Ben Rolfe of Tavira, says the shares are still a buy as rivals could be prepared to pay more for such a niche player: and it doesn't look bad as a standalone player either.

What a turnaround. Four years ago this summer when Sir Nigel Rudd became chairman, the shares were rock bottom at 215p. Created out of an ill-conceived merger between BTR and Seibe, Invensys was close to collapse, burdened with a huge pension deficit and 100,000 pensioners depending on it for their future.

As Sir Nigel confided in me at the time, finding a way to pay pensioners was what kept him awake at night. They were his first priority; his second was to keep the 16,500 employees in jobs, and then, came his duty to shareholders.

More crucially, he had to get Invensys back on track before being gobbled up on the cheap. That's why selling off the rail division to Siemens last year for £1.74bn was such a masterstroke; on the eve of the sale the whole of Invensys was worth £1.7bn. This allowed Invensys to sort out the pension deficit, return 77p per share to shareholders and get the market to finally revalue the business.

By far the biggest chunk is the industrial automation side, the Foxboro division based in Dallas, which supplies control systems and safety systems to some of the world's most complex industrial plants such as oil refineries and power.

Smaller, but growing fast, are the energy controls and the software operations.

In truth, Invensys is now a US business that just happens to have its HQ in the UK; less than 5 per cent of turnover and profits and less than 10 per cent of the 16,500 staff, are based here and nearly all the R&D work is in the US. If it weren't for the US tax regime, Invensys would have upped sticks to the US ages ago.

So the idea that Sir Nigel is selling Britain's family silver to foreigners is poppycock.

Bid or no bid, Sir Nigel should be getting plaudits not brickbats for having saved pensions, jobs and put money back into our pensions: Schroders and the Pru are big investors. Quite a hat-trick by any standards.

Vodafone must go out of its way to get in punters' good books

When the going gets tough, the tough go shopping. If Vodafone's first-quarter figures are anything to go by, shoppers are also getting bolshy and refusing to spend more than they can afford.

The mobile phone giant saw a sharp drop in sales, down 3.5 per cent to £10.1bn, in the three months to June. As expected, southern Europe was the bleakest. Perhaps the bigger surprise was the sales downturn in the UK, down 4.5 per cent, and in Germany, down 5.1 per cent.

The Brits are proving particularly careful and sticking to their fixed-price plans, spending less on extra calls and texts while many are switching operators – Vodafone lost 100,000 pay-as-you-go customers. Boss Vittorio Colao blames fierce price-cutting from competitors for the falls. In some countries, like Italy, he's matching price cuts but not here.

Perhaps he should reconsider. With the challenge from EE and others and the growth of services such as Skype, customers are proving fickle as well as bargain hunters. Colao should tread carefully if he wants to keep customers loyal.

Suggested Topics
News
Alex Salmond said he accepted 'the democratic verdict of the people'
newsSNP leader says Scotland must move forward as 'one nation'
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week