Invensys shares rally with speculation of counter offers We believe the sale of the rail division raises the possibility of Emerson renewing its interest in the remaining assets. Broker notes released following the announcement mostly recommended investors "buy" the company's shares, but some did suggest a hold. Nomura raised the target price from 330p to 370p and reiterated its buy rating, Barclays Capital raised its target price from 235p to 385p and upgraded the stock to overweight, while Deutsche Bank raised its target price from 230p to 295p but kept its hold recommendation. However, several analysts think the German engineering company has paid too much for Invensys' rail division. "Siemens is paying close to the total market capitalization of Invensys before the deal was announced, for only part of the business," said Martin Prozesky, an analyst at Sanford C Bernstein Ltd in London told Bloomberg. The price paid is very high, it looks to me like Siemens, again, overpaid. Heenal Patel, an analyst for electrical engineering at Bloomberg Industries agreed and said: "The deal looks quite expensive, but clearly fits with the strategy Loescher has communicated - reducing exposure to pure manufacturing activities and pushing more into areas of automation and control." The sale surprised analysts after selling the rail division for just £50m less than market value of the entire industrial software company. As part of the deal, Invensys will hand £625m back to shareholders, as well as a further £625m to its own pension fund. Counter offers could be expected from Canada's Bombardier, which is seen as a another potential bidder for the Invensys rail business, and interest could also come from Chinese and Japanese rail companies such as China Southern Rail and Hitachi Rail. General Electric and ABB have also been seen in the past as buyers of the whole company and the sale of the rail unit raises the prospect of a counter-bid for the entire business.