Invensys dives after Emerson walks away

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The Independent Online

Shares in Invensys tumbled by 14 per cent yesterday, after it was forced to make an embarrassing U-turn and admit US giant Emerson had made a £2bn-plus bid approach but gone away.

On Wednesday, Invensys shares soared by 27 per cent on just such a rumour, despite the fact the group said it did not comment on market speculation.

City sources said that the engineer, its chairman Sir Nigel Rudd (pictured) and its financial adviser JPMorgan Cazenove had come under pressure from the Takeover Panel to make it clear to investors whether it had received an approach.

The panel was in touch two months ago when Invensys shares jumped 10 per cent in one day on the same rumour. At that time Invensys made no statement but was put on notice by the panel that it would have to in future if there was further "untoward movement in its share price". Sources said talks with Emerson had "ended months ago".

But the announcement to the Stock Exchange simply stated "whilst it had previously received a highly preliminary approach from Emerson Electric for the group, these discussions are no longer ongoing".

Invensys also admitted that more recently it has been in discussions with other "third parties" about selling off individual businesses but that these, too, were no longer happening. Speculation has it that Siemens would like Invensys's rail business.

Yesterday the shares dropped 37p to 220p.