(Bloomberg) -- Smiths Group Plc shares rose to their highest in more than a year on Monday as analysts threw support behind a potential sale of its medical-equipment business.
Blackstone Group Inc. and Cinven are among buyout firms weighing bids for the U.K. industrial conglomerate's unit, people familiar with the matter said last week. Smiths Group had said previously that it was planning to separate the medical business via a listing after talks with another suitor collapsed.
A sale would be a cleaner exit than spinning off another traded business, Liberum Capital Ltd. analyst Ryan Gregory said in a note. A deal could value the medical unit at at least 3 billion pounds ($3.6 billion) based on peers' multiples, money that could be used to strengthen Smiths Group's remaining business, Bloomberg Intelligence analyst Johnson Imode said in a report on Friday.
While the focus has been the listing, Smiths Group is open to considering offers, the people had said. The company may wait until it has a better view on potential equity market valuations before seriously engaging with any suitors, one of the people said. The unit makes devices such as patient monitors and drug delivery systems that are used in ambulances, hospitals and care homes.
The stock gained as much as 1.7% to 1,698 pence, the highest intraday level since July 2018. It was trading 0.8% higher at 12:08 p.m. London time on Monday, giving the company a market value of about 6.7 billion pounds. The shares had gained 1.9% on Friday after Bloomberg News's report.
--With assistance from Tom Lavell.
To contact the reporters on this story: David Hellier in London at dhellier@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net;Sarah Syed in London at ssyed35@bloomberg.net
To contact the editors responsible for this story: Dinesh Nair at dnair5@bloomberg.net, Amy Thomson
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