Cambridge UK software company AVEVA and French group Schneider Electric have revived a deal that looked dead and buried in mid-December.

A 10 per cent surge in its share price to a year high prompted AVEVA to announce that terms were being hammered out in a fresh bid to agree a merger that tilts heavily in the Cambridge technology company’s favour.

AVEVA CEO Richard Longdon said he was unable to comment at this time but told Business Weekly last July when the deal was first tabled that it could turn the Cambridge-based group into a global software giant worth around £3 billion with a headcount of some 3,500 people.

The parties bailed out of complex negotiations mid-December having failed to reach consensus but continued press speculation about a new offer from Schneider brought today’s admission that AVEVA had received a revised, conditional proposal.

Similar to the previous discussions that took place between the parties last year, the proposal also includes a significant cash payment from Schneider Electric to AVEVA, which would be distributed to AVEVA’s current shareholders on completion.

The proposed transaction, if consummated, would result in Schneider Electric owning a majority equity stake in the enlarged AVEVA, which is intended to remain listed on the London Stock Exchange.

Today’s statement read: “The board of AVEVA is currently in preliminary discussions with Schneider Electric regarding the merits of such a transaction and its terms. 

“There can be no certainty that the discussions between AVEVA and Schneider Electric will lead to any agreement concerning the possible combination or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would be completed. A further announcement will be made as and when appropriate.”

Such a transaction, if completed, would constitute a reverse takeover under the listing rules. 

Accordingly, the listing of AVEVA ordinary shares on the official list and trading on the main market of the London Stock Exchange are being suspended with immediate effect. 

The listing and trading of AVEVA ordinary shares will recommence at the earlier of the publication of updated financial information on Schneider Electric’s Software Business in accordance with Listing Rule 5.6.15 or confirmation that AVEVA is not proceeding with a potential transaction.

• PHOTOGRAPH SHOWS: Richard Longdon