What is going on at Invensys?
The chief executive of the FTSE 100 controls company, Ulf Henriksson, has just been unceremoniously bundled out of the boardroom on Thursday morning without any explanation.
Invensys press release.
Invensys plc announces that Wayne Edmunds, who has been Chief Financial Officer of the Company since 2009, has been appointed Chief Executive with immediate effect. Ulf Henriksson has today stepped down as Chief Executive and as a director of the Company. David Thomas, who has held senior financial roles within the Group since 2002, has been appointed Acting Chief Financial Officer and a permanent appointment will be made in due course after consideration of internal and external candidates.
Odd.
Very odd.
Surely shareholders deserve better than this. After all, Henriksson helped fix and reposition the company, whose products help control the smooth running of railways, nuclear power stations and washing machines, something Invensys’ serial chairman Sir Nigel Rudd grudgingly acknowledged.
I would like to thank Ulf for his hard work and achievements which have delivered a transformation of Invensys. We wish him well for the future.
That said Henriksson did put his foot in it back in November. In an interview with the Daily Telegraph he said joint venture partner China Southern Rail Corp had the “possibility of acquiring Invensys” if the price was right.
Mr Henriksson said that CSR taking a minority stake in Invensys would tie the two companies together as they seek to bid for new contracts as a consortium. “I would like to see the Chinese using their cash outside China and taking ownership of Western companies,” he said. “I believe that CSR has the possibility of acquiring Invensys, in principle, in its logic, as long as the shareholders accept the price. It is not my preference though.
That caused something of a kerfuffle which resulted in Invensys spitting out this mealy-mouthed statement.
Contrary to recent speculation, Invensys confirms that it has not received an approach nor had any discussions regarding a possible offer for the Company or about a strategic partner taking a minority stake.
Whether that played any part in his assassination by Sir Nigel — a boardroom bruiser — is not clear. A more likely explanation is Henriksson has done his job fixing the business and the board have decided they want someone to drive the business forward in an increasingly competitive market.
Either that or he’s found a better job or there was a row about how best to use the company’s cash reserves. (Return it to shareholders, make bolt acquisitions or invest in fast-growing markets like Brazil and China are the options open to Invensys).
Anyway the new man, Wayne Edmunds, is highly rated by some in the the City. And unlike Henriksson he speaks english and not management gobbledygook.
Not that you would guess it from the share price reaction. At pixel time shares in Invensys were 22.4p lower at 334p – the biggest faller in the FTSE 100.
But that’s probably more a reflection of the way Invensys and Sir Nigel have handled the situation. A smooth transition this is not.
In the meantime, we are off to find the details of Henriksson pay package and see what compensation he might be entitled to.
We are also going to muse on what this part of today’s statement means.
At the time of the Interim Management Statement on 20 January 2011, we reported that our performance in the current year ending on 31 March 2011 was on track and that we continued to expect the Group to deliver improved performance. This remains the position today and we currently expect that the results for the year, which will be published on 19 May 2011, will be broadly in line with market expectations.
Related links:
Invensys boss calls for Chinese buyer as bid talk mounts - Daily Telegraph
Invensys on track for new pay-out policy – FT