Invensys dives after Emerson walks

Shares in Invensys tumbled 17% today after it was forced to make an embarrassing u-turn and admit US giant Emerson had made a £2 billion-plus bid approach but gone away.

Yesterday Invensys shares soared 27% on just such a rumour despite the fact the group said it did not comment on market speculation.

City sources said that engineer Invensys, chairman Sir Nigel Rudd and its financial adviser JPMorgan Cazenove had come under pressure from the Takeover Panel to make it clear to investors whether or not it had received a bid approach.

The panel was in touch two months ago when Invensys shares jumped 10% 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 that 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 Co 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 rail business while Emerson and General Electric want other parts of the business.

Today the shares dropped 42.3p to 214.85p.