Smith's soars with news of windfall

The promise of a windfall for shareholders caused shares in industrial conglomerate Smiths to jump by more than 13% today.

The promise of a windfall for shareholders caused shares in industrial conglomerate Smiths to jump by more than 13% today.

The return of cash from the proposed sale of the company’s aerospace division proved the highlight of a strong opening to the week for the FTSE 100 Index, which stood 27.1 points higher at 6266.1 by mid-morning.

London’s strong rise came after the Dow Jones Industrial Average hit another all-time high on Friday and Asian markets followed suit.

The developments at Smiths, following the sale of the aerospace business to General Electric for £2.25 billion, also fuelled speculation that other parts of the UK conglomerate could be the subject of corporate activity. Shares were up 129.5p to 1114.5p as Smiths said it would return £2.1 billion to shareholders.

Other industrial groups benefited from the consolidation, with BAE Systems ahead 8.75p to 426p, a gain of 2%. BAE was also the subject of speculation that it could join forces with private equity group Carlyle in a joint bid for control of Britain’s nuclear submarine industry.

Rolls-Royce was among firms to benefit from a upgrade of the aerospace sector by Deutsche Bank. The engines giant was up 10p to 486p, while in the second tier Meggitt gained 15p to 338.75p and Cobham cheered 6.25p to 208p.

Elsewhere in the top flight, Vedanta Resources was up 26p at 1136p after the blue-chip mining company posted solid third quarter results.

And shares in BP continued to rise after Friday’s announcement that chief executive Lord Browne had brought forward his retirement date. With oil prices also higher, BP was up 2p at 553.5p as Royal Dutch Shell rose 11p to 1382p.

In the FTSE 250 Index, Aga Foodservice dipped 16.25p at 403.75p after it said in a trading update that it would take a £1 million hit from its failed bid for kitchen products firm Enodis.

Ends

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up