WEIR Group has seen its shares surge more than four per cent after speculation it may be the subject of a private equity backed takeover bid.
A possible bid price of 2500p, which would value Weir at more than £5.35 billion, from a US firm has been mooted but nothing concrete has yet materialised.
However there was heavy trading in the stock with more than 2.2 million shares changing hands.
The price was ahead by more than five per cent for much of the day before falling back slightly but still ending trading up 74p to 1813p.
That raised Weir's market capitalisation by around £158 million to £3.88bn.
In a note Tony Cross, market analyst at Trustnet Direct, said: "The share price has fallen by almost a third over the last six months as the commodities rout has taken a toll on prospects, so the prospect of someone seeing value at this level cannot be ruled out."
The stock was trading as high as 2761p as recently as September but has slipped amid concerns about how the low oil price will affect Weir's performance.
It fell below 2000p in October and has generally been between 1600p and 1800p in recent months.
Last month Weir announced it was cutting 650 jobs in its North American business, where it has a major presence providing parts and spares to the United States shale industry and the Canadian oil sands sector, in a bid to mitigate the impact of low prices.
The oil and gas division had been Weir's best performing and largest market division in recent years.
But alongside the difficulties now emerging in that sector its mining and industrial divisions are also facing ongoing difficult trading conditions.
The Glasgow valve and pump maker is factoring in at least a two year downturn in oil prices.
In May last year, when shares were trading above2600p, it launched an ambitious £3.7 billion bid for Finnish rock crushing and engineering company Metso.
When that deal failed to get off the ground there was a suggestion Weir may come into play for a larger engineering group such as General Electric.
But no bids emerged for company even though there was an expectation of further consolidation in the sector.
Weir then paid £138m for Chinese mining services firm Trio in October as it aimed to widen its service offering and goegraphic spread.
In response to the falling oil price during November Weir announced a £35m cost saving plan which would see around 250 jobs around the world cut and the closure of a number of smaller manufacturing centres in Europe and the United States.
It is also aiming to make tens of millions of pounds of savings through better procurement practices.
Last month it revealed underlying profits had dropped two per cent from £418m to £409m on flat revenue of £2.4 billion for 2014.
After taking off exceptional items, including restructuring costs and a near £90m write down of the value of its North American operations, pre-tax profits fell from £431m to £149m.
As a result of the lower oil prices chief executive Keith Cochrane has already warned Weir will experience reductions in profit and turnover during 2015.
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