Visteon Corp.'s debt rallied today on increasing speculation that France-based auto parts supplier Valeo SA may make a bid for all or part of the firm.
A hedge fund controlled by Karim Samii holds more than 5 percent of Valeo, the AMF French financial markets watchdog said today.
The reports of the hedge fund stake in Valeo increased speculation that it may make a bid for Visteon, analysts said.
Visteon's credit default swaps tightened to about 422 basis points, or $422,000 per year for five years to insure $10 million in debt, from around 490 basis points early on Tuesday, Jan. 16.
The auto parts supplier's 8.25 percent bond due 2010 rose 1.75 cents to 100.75 cents on the dollar, according to MarketAxess.