Meggitt jumps higher on Cobham merger report

Shares in defence and aerospace engineer Meggitt rose on Tuesday following a report in the Financial Times that a merger with Cobham might be on the cards.

Atif Latif, director of trading at Guardian Stockbrokers, said he sees the rationale of a tie-up between the two as a defence play.

“Both valuations have suffered alongside the drop in the oil price that has been negative for the sector. The valuations remain undemanding after the drop and trade under par versus the sector,” he said.

Latif said the drop in Meggitt shares of late makes this deal more plausible.

At 10:40, Meggitt shares were up 1.9% at 479.30p, while Cobham was 0.7% higher at 272.80p.