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Rumors Of Acquisition Boost Goodrich

Mon, 09/19/2011 - 9:30am

NEW YORK (AP) — Shares of Goodrich Corp. soared on Monday as investors weighed rumors that United Technologies Corp. may want to buy the aerospace manufacturer.

Goodrich shares jumped $11.38, or 12.3 percent, to $104.27 in morning trading. The stock closed up $6.41, or 7.4 percent, at $92.89 on Friday, when speculation began about a possible bid by United Technologies.

Meanwhile, shares of United Technologies fell $1.40, or 1.9 percent, to $74.10.

Jefferies analyst Howard Rubel cautioned investors, saying the status of talks about the potential acquisition was unclear. But he added that he was not surprised that United Technologies would want to make a big acquisition to expand its business.

Buying Goodrich could boost United Technologies' earnings by 5 percent to 10 percent in 2012 and 7 percent to 12 percent in 2013, Rubel said.

KeyBanc analyst Michael Ciarmoli was also wary. He said that he had seen no "conclusive evidence" that the two companies had reached a deal. Moreover, he said that United Technologies has several times tried and failed to buy other smaller industrial companies. He started coverage of Goodrich, which is based in Charlotte, N.C., company with a "Hold" rating on Monday.

 

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