The planned merger between Siebe and BTR seen by the stock market as a thinly disguised agreed takeover by Siebe set long-neglected engineering shares ablaze this week.
The two protagonists led the way, but bargain hunters were looking for other bid prospects, hoping Siebe will be the first of many to take advantage of bombed-out engineering share prices.
BTR’s shares showed the scope for dramatic profits. Almost instantly they jumped 38p, or 40%, from a low of 95p last week. They had fallen from 215p earlier this year and from 410p in 1994.
The price ran ahead to 136p early on Tuesday before the whole market turned down. That was little more than the mathematical value of the merger terms, suggesting that some dealers expect a counter-bidder.
Siebe’s shares were also in good form, rising to 243p before easing slightly on Tuesday. They have been out of favour with the stock market recently, though less so than BTR’s, sliding from a peak of 383p in June.
Other engineering shares to show strongly included TI, which reached 354p, up 27p on last week, boosted by a reassuring trading statement.
IMI gained nearly 5% on Monday, although shares stand at barely half the price they hit this summer.
Others catching up strongly include British Aerospace, fast approaching its peak of 545p. Rolls-Royce and GKN, both left behind in the market’s recent recovery, also attracted support.