Schneider Said to Plan Syndication of $3.9 Billion Invensys LoanStephen Morris
Schneider Electric SA will begin marketing a 2.56 billion-pound ($3.9 billion) loan next month backing its proposed acquisition of Invensys Plc, according to three people with knowledge of the situation.
The one-year financing, which can be extended by 364 days, will be syndicated at the start of September, said the people, who asked not to be identified because the deal is private. Schneider, based in Rueil-Malmaison near Paris, hired Bank of America Corp., BNP Paribas SA and Deutsche Bank AG to arrange and syndicate the facility, according to documents on the French company’s website.
The world’s biggest maker of low- and medium-voltage power gear agreed to pay 3.4 billion pounds to acquire Invensys, a U.K. provider of software and control systems used by chemicals makers, oil refineries and mining companies. It has offered the equivalent of 502 pence a share in cash and new Schneider shares.
Officials at Schneider Electric based in Rueil-Malmaison didn’t respond to telephone calls and e-mails seeking comment on the loan syndication.
The bridge financing, a type of debt often replaced with bond offerings or longer-dated bank loans, will pay an initial interest margin of 30 basis points, or 0.3 percentage points, more than benchmark rates, rising every three months to 1 percentage point after one year, and then to 1.25 percentage points after 18 months, the facility agreement shows. The margin will increase further if the company’s ratings fall.
Schneider obtained a 1.2 billion-euro ($1.6 billion) five-year credit line in June that pays an initial margin of 40 basis points more than the euro interbank offered rate, according to data compiled by Bloomberg.