Aveva tops FTSE 250 on Berenberg upgrade

“Our discussions with various interested parties have strengthened our view that the deal between Aveva and Schneider will close,” it said.

Berenberg noted that Schneider has acquired a number of software assets over the past five years and as a result, the bank reckons its management is strongly motivated to close its reverse takeover of Aveva.

While Aveva’s share price seems to reflect the market’s uncertainty about the deal closing, Berenberg said it believes the due diligence process is drawing to an end and the publication of a prospectus will create more certainty.

Berenberg said that at a share price of 1,772p, which was used in Schneider’s announcement of key terms, the embedded value of Aveva is £1.3bn.

“We thus view Schneider’s £550m payment as a bid premium (42%) to Aveva shareholders. This is higher than the average for tech premiums but it bolsters our belief that Schneider has a strong desire to close the transaction.”

It said the enlarged group would strengthen Aveva’s key markets in oil and gas, marine and power.

It would also diversify the business into other industries, such as chemicals, food and beverage, mining, water and waste water, and pharmaceuticals, said the bank.

At 0840 BST, shares in Aveva were up 6% to 2,129p, topping the FTSE 250.