The prospect of a bid battle powered Invensys shares to a 10-year high yesterday, after the British engineer said it had received a £3.3 billion takeover proposal from France's Schneider Electric.

Invensys said Schneider, which confirmed only that it had made a proposal, was considering an offer of 505p a share in cash and stock, 15 per cent above Invensys’ closing price on Thursday.

A deal would allow Schneider to tap the British firm’s strength in industrial automation, which is enjoying rapid growth in the oil, gas, petrochemicals and utilities sectors.

However, Invensys shares jumped as high as 513.5p on speculation the proposal could flush out other bidders.

Morgan Stanley analysts said the price proposed by Schneider was “fair and reasonable”. – (Reuters)