LONDON (ShareCast) - M&A activity gave the software and computer services sector a lift on Friday after technology firm Invensys became the target of a 3.3bn-pound takeover from French group Schneider Electric.
Shares in Invensys were up nearly 16% in afternoon trade at 508.5p after it said it received a cash and paper takeover approach, sparking speculation that other potential bidders could now emerge.
Invensys, which provides software, systems and controls for oil refineries, power stations and mining companies, has long been the subject of bid hopes but its pension deficit had been seen as a stumbling block for suitors. This was reduced following the sale last November of Invensys’s rail division when the company made a £400m payment into the pension scheme.
Takeover talks with Emerson Electric broke down last summer and it is thought that the US company will be tempted to take a look before Schneider seals a deal.
"On the whole, encouraging to see M&A activity pick-up, demonstrating that corporates are looking to put their money to work after years of hoarding it during the financial crisis," said Market Strategist Ishaq Siddiqi from ETX Capital.
Others in the sector including IDOX, Micro Focus International, Allocate Software and 1Spatial were also making decent gains on Friday.
Top performing sectors so far today
Software & Computer Services 1,188.09 +3.57%
Automobiles & Parts 7,806.80 +2.20%
Electronic & Electrical Equipment 3,851.49 +1.66%
Media 5,814.05 +1.24%
Forestry & Paper 9,785.78 +1.23%
Bottom performing sectors so far today
Household Goods & Home Construction 10,826.13 -2.80%
Mining 14,963.44 -0.98%
Industrial Metals & Mining 1,168.17 -0.85%
Industrial Transportation 2,907.96 -0.66%
Real Estate Investment Trusts 2,501.56 -0.46%
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