UK engineering business Meggitt (MGGT) saw its share price surge after the jet parts manufacturer was linked as a possible buyout target.
Shares in Meggitt jumped 15% in early trading, hitting 530p, after the Dealreporter website reported that US aerospace engineer Woodward was mulling a potential bid for the UK business.
The reported interest comes after the London-listed aerospace parts maker saw its value plunge in response to the Covid-19 pandemic early in 2020 as the aviation industry came under huge pressure because of global travel restrictions that forced plane makers to cut production rates.
Between mid-January 2020 and early April, Meggitt shares lost two-thirds of their value on their way to lows of 217p, wiping more than £4 billion off the company’s market value.
Meggitt provides equipment to more than 70,000 planes worldwide.
VALUATION REBOUND
The stock has staged a sharp recovery in recent months, rallying 70% since October 2020 to last night’s 460p close.
In March Meggitt said that it could return to profit growth in 2021 provided there are no further coronavirus lockdowns. Its underlying operating profit plunged 53% last year, while plunging to a £297 million headline operating loss.
Meggitt has a market capitalisation of £4.35 billion following the stock’s latest rise, versus Nasdaq-listed Woodward’s $8 billion, equivalent to approximately £5.75 billion at current pound/dollar exchange rates.
Meggitt has so far no commented on the speculation.
