Speculation Mounts Over Whether Schneider Is Bidding $30 Billion for Tyco
Speculation over a potential takeover of Tyco, ADT and SimplexGrinnell’s parent company, by Schneider Electric, the French electrical engineering group, has risen to a fever pitch since Bloomberg reported on Monday that Schneider had begun researching a Tyco acquisition and The Wall Street Journal followed with reports that a Schneider bid for $30 billion had landed on the negotiating table.
While Tyco has at press time yet to address the rumored discussions, Schneider issued a statement Wednesday morning denying those reports: “In response to market rumors, Schneider Electric announced today that it is not currently in discussion with Tyco International regarding a potential strategic transaction between the two companies. Schneider Electric stated that it would make no further comment regarding this matter.”
However, this assertion has done little to stop the spread of stories and opinions on the matter. Many dismiss Schneider’s statement as ambiguous and attribute the company’s effort to debunk rumors to the drop in Schneider’s stock since these first reports emerged on Monday as well as an attempt to avoid increasing Tyco’s purchase price.
Bloomberg quoted Paris-based analyst, Pierre Boucheny, saying, “Schneider’s statement leaves the door open, and it’s in their interest to calm things down as Tyco has risen a lot. The market’s message to Schneider is that there’s a funding issue and that they have to come up with a clear divestment plan.”
All reports do seem to agree that the companies are only in the beginning stages of discussing the matter and therefore the full impact of a Tyco buyout is more than uncertain. What do you believe a successful acquisition of Tyco by Schneider could mean for the security industry?