Rolls-Royce Holdings PLC (LSE:RR.) shares rose 2% on Monday morning after a report that the engine maker was exploring a potential spin-off of its small nuclear reactor arm.
The FTSE 100 group also received a boost from the £10 billion deal announced by the UK Ministry of Defence to sell Type-26 warships to Norway, as it supplies some equipment to BAE Systems for the frigates.
A Financial Times report at the weekend said the engine maker is looking at funding options for its Small Modular Reactor nuclear business, including a potential IPO.
Rolls denied the story, telling media Rolls-Royce SMR "is not planning for, or in the process of launching, an initial public offering".
The company's talks with investment houses and banks are focused on future funding needs and are at an early stage, the FT story said.
Back in June, Rolls-Royce SMR was chosen as the UK government's preferred bidder to develop the UK’s first small modular nuclear reactors.
"It’s fair to say that investor appetite to back a spin-off vehicle from Rolls-Royce could be huge," said analysts at AJ Bell.