* CEO Ulf Henriksson steps down with immediate effect
* CFO Wayne Edmunds appointed CEO
* Says trading for current year on track
* Shares down 5 percent
(Adds further details, analyst comment, updates shares)
By Paul Sandle
LONDON, March 24 (Reuters) - UK engineering firm Invensys has replaced its chief executive Ulf Henriksson, who last year raised the prospect of the British company being sold to the Chinese, saying its finance chief Wayne Edmunds takes over as chief executive with immediate effect.
Shares in the maker of rail signalling systems and controls for industrial plants, nuclear power stations and domestic appliances fell as much as 8 percent after the announcement, and were trading 5 percent lower at 340 pence by 1324 GMT, the biggest FTSE faller.
Henriksson, chief executive since 2005, generated headlines in November when he said China Southern Rail could buy the company at the right price.
His comments, and subsequent share price rise, forced the company to issue a statement denying it was in takeover talks.
Chairman Nigel Rudd said Henriksson had transformed Invensys, but Edmunds would lead the company through the next stage of development.
David Thomas, who has been with the company since 2002, takes over as acting finance director.
Charles Stanley analyst Jeremy Batstone-Carr said Henriksson had done a reasonable job as chief executive and had attempted to reduce the cyclicality in the business by building up the rail business in particular.
But he had also raised the possibility of a break-up of the company, he said.
"We haven't had a profit warning so the market reaction is fairly muted, which is probably cautiously appropriate in the circumstances," he said.
Invensys said trading for the year to end-March remained on track and it continued to expect an improved performance on a year ago.
The company was formed from the merger of engineering businesses Siebe and BTR in 1999 in a deal that left the group saddled with debt. Its bankers stopped it paying dividends or making major acquisitions for a period until it had repaid high-yield debt after a major restructuring and disposals.
Edmund's basic salary rises to 650,000 pounds from 425,000 pounds, the company said, below the 845,000 pounds basic salary paid to Henriksson in the year to March 2010.
Henriksson received a total of 2.46 million pounds including bonuses and pension in that year, according to the company's annual report. (Editing by Greg Mahlich)