Shares in industrial conglomerate Smiths Group (LON:SMIN) jumped on Tuesday amid talk that an activist investor was muscling in.
The stock rose more than 5% after reports that US hedge fund ValueAct had taken a stake of up to 5% in the maker of X-ray security scanners and medical equipment.
ValueAct is said to believe Smiths’ medical device business and John Crane seals division could be takeover targets.
It comes days after ValueAct took a stake in jet engine maker Rolls-Royce (LON:RR.) to try to push its new management to save more money.
Smiths has taken on a new chief executive to replace Philip Bowman, who was widely expected to break up the group when he arrived from Scottish Power.
Bowman was frustrated in his shake-up efforts by pension and asbestos liabilty issues.
Last month, Smiths said it had replaced Bowman with Andrew Reynolds-Smith, the chief executive of the automotive arm of engineer GKN (LON:GKN).