Neil DennisShares in engineering group GKN recovered some poise on Monday following a profit warning nearly two weeks ago as investors mulled the possibility of the company splitting into two businesses.
Reports in the UK weekend press followed a Sunday Times report that GKN was in the early stages of considering break up to form separate aerospace and automotive businesses.
Wasi Rizvi, analyst at RBC Capital Markets said: "Our conversations with investors suggested that a scenario in which GKN becomes an aerospace pure-play was the favoured potential outcome."
Market reaction
Shares in GKN were up 3.3% to 313.8p in mid morning trade in London.
The rebound was a welcome relief even though the shares remained nearly 13% lower since a profit warning on 11 October.
Profit warning
The company said that legal claims of around £40m in the fourth quarter would add to pressure from business writedowns in the fourth quarter.
It added that it now expected profits to be only "slightly above" those of last year, rather than its earlier forecast of 10% year-on-year profit growth.