Bovis (BVS) and Amec Foster Wheeler (AMFW) have jumped to the top of the FTSE 250 after both the house builder and oil services firm were the subject of bid approaches.
Shares in Bovis were up 8.3% at 896.5p after the house builder said it was in talks with Galliford Try (GFRD) over a takeover, having rejected its rival's first approach. It also rejected a deal from Redrow (RDW).
But it was beaten to the top of the index by Amec Foster Wheeler, up 15.4% at 564p after rival oilfield services firm John Wood Group (WG) made a £2.2 billion bid for the business.
The bid for Bovis comes after months of takeover speculation over the troubled house builder, which issued a profit warning at the end of last year, saw boss David Ritchie leave and last month further cut back forecasts.
Andy Brough, manager of the Schroder UK Mid 250 fund and Schroder UK Mid Cap (SCP ) investment trust, had attempted to engineer a merger, writing to rival Berkeley (BKGH) encouraging it to bid for Bovis.
Robin Hardy, analyst at Shore Capital, was sceptical about the deal. 'It is far from clear whether we yet know the full extent of what is wrong at Bovis, so unless any bidder would be able to see very open books, buying Bovis would be a fundamental risk,' he said.
'This is in addition to the more fundamental issue of whether it makes sense for a larger house builder to buy a competitor in this cycle or whether shareholders are best served by either organic growth or the acquisition of smaller, private business such as the purchase made by Redrow.'
But UBS analyst Miguel Borrega said the deal appeared 'a reasonable option'. 'Consolidation amongst two mid-cap home builders makes sense in order to gain scale and achieve cost efficiencies,' he said.
'Bids from other home builders are unlikely based on current good returns on land purchases: because of that, larger homebuilders will likely focus on organic expansion through land acquisition.'
Shares in Galliford Try were flat at £15.74 on the news while Redrow rose 1.5p to 500p.
John Wood Group's takeover bid for Amec Foster Wheeler was meanwhile welcomed by both sets of shareholders, with shares of the suitor up 3.5% at 778.5p.
'The deal appears beneficial to both sets of shareholders - hence a positive reaction by both share prices - providing a lifeline for struggling AMFW and rekindles bullishness in WG as the industry in which both operate adjusts to a new normal of oil prices around the $50/barrel mark,' said Mike van Dulken, head of research at Accendo Markets.