Schneider Backs Away from Tyco Deal

It appears that a lack of cohesion on Schneider’s board of directors regarding the merits of a deal to buy Tyco, may have given pause to its CEO in his attempts to pursue the transaction.

While it is always possible that talks will be revived, people on both sides seem doubtful of that possibility at this juncture.

It was a week that startedwith much promise for a deal in which Tyco would be bought by France’s Schneider and ends with the chances of that deal having diminished significantly.

The two companies had been involved in deal talks since last October and the momentum for a purchase in the low $60’s per Tyco shares was building, according to people close to the talks.

That momentum, however, has been dealt a significant blow after leaks of the potential deal hit earlier this week, sending Tyco shares skyward, but punishing shares of its would-be acquirer.

The chances of a deal are now said to be a “long shot”, by one person close to the deal.

Schneider said two days ago that it was not “currently” in talks with Tyco, a perhaps accurate but misleading characterization that did not shed light on the talks that had already taken place.

As I reported earlier this week, Tyco is a willing seller. But thus far, it has yet to receive any interest from other potential purchasers.

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