Stockbroker Henderson Crosthwaite believes Racal's shares are therefore worth around 450p. They rose 15.6p to 371.5p, a peak.
Sir Ernest Harrison, Racal's chairman, has already successfully hived off Vodafone and Chubb Security (now part of Williams) as stand-alone companies. His intention is to float 25 per cent of RT although if the Vodafone formula is followed the group will eventually severe its link with its parent.
Henderson's telecom analyst Chris Godsmark, formerly business correspondent of The Independent, says Sir Ernest has built one of Britain's largest telephone services from a 1988 standing start. He believes Telecom Italia and Deutsche Telecom thought about buying RT when Racal started to review its options last year.
At least one bid did materialise. Duncan Lewis, former chief of Granada's media division, got together a pounds 450m offer but Sir Ernest said no and decided to follow the flotation path.
"Racal's decision to pursue a flotation as the best way to maximise shareholder value has proved fortuitous," says Mr Godsmark. "In the six months since that decision share prices in the telecom sector have risen strongly on a combination of bid speculation and more optimistic predictions of the growth of data traffic."
Energis, RT's closest competitor, has climbed from 251p in the autumn to 779p, he points out.
Sir Ernest, who is 72, has been chairman of Racal, which has 26.6 per cent of National Lottery organiser Camelot, for 32 years.
As RT prepares for market, the struggling Ionica wireless telephone group crashed 49p to 36p. It is seeking more cash and is looking for a strategic investor which could result in "significant dilution to existing shareholders". The shares were floated last summer at 390p, producing a pounds 460m war-chest. They touched 421p.
Footsie turned on a mixed display, ending 20 points up at 5,955.6. Supporting indices were once again in rampant form. The mid cap surged 43.3 to a 5,897.8 peak; the small cap added 6.1 to a 2,788.4 high.
Among the mid caps Electrocomponents enjoyed a 34p gain to 584p with the help of vague takeover speculation.
Bus and train shares, such as Stagecoach and FirstGroup, were again given the green light as the market continued to drew encouragement from the coming Government White Paper on the transport industry. Stagecoach advanced 72.5p to 1,367.5p and FirstGroup 17p to 443.5p. Railtrack gained 23.5p to 1,229.5p, a high.
Barclays, after meeting analysts, put on 26p to 1,696p; Halifax rose 33.5p to 842.5p. Rolls-Royce was another to score from investment presentations. As its US roadshow drew to a close the shares climbed 6p to 300p.
EMI, figures next week, fell 19.5p to 522.5p as Seagram, in effect, clinched the takeover of PolyGram, ending any lingering hopes of a another strike at EMI.
Rentokil Initial, up 18.5p at 431.5p, was one of the Footsie leaders. Many await a strike for Compass, the contract caterer, up 42p to 1,269p.
Safeway, on continuing speculation about a break-up bid, rose 12.75p to 393p. British Land, in association with Asda, remains the most likely predator.
Any deal would involve Asda cherry picking around 60 Safeway stores. Such a manoeuvre could overcome the Government's objection to an Asda/Safeway merger. A suspicion that Somerfield could also enjoy pickings from Safeway's stores portfolio gave the shares a 12.5p lift to 374p
Mirror, the newspaper group, rose a further 6.5p to 218p as the German Axel Springer Verlag group admitted it may bid. The shares have climbed 21.5p this week.
Misys, the computer group elevated to Footsie this week, fell a further 37p to 3,380p. Newcomer ComputaCenter was another catching its breath, off 22.5p to 743.5p.
The Falkland Islands oil tiddlers had another gushing session although profit takers took their inevitable toll. Desire touched 475p; it closed at 415p, up just 1p. Greenwich Resources, after hitting 41p, ended 1.5p off at 36.5p. Westmount, at one time around 275p, ended at 245p, up 10p.
Imperial Chemical Industries managed to resist an ABN Amro downgrading. The investment house described the shares as "overvalued". It expects profits of pounds 531m this year, up from pounds 518m.
Ladbroke was another to shrug off uncomfortable developments - the likelihood that it will have to sell more than 100 betting shops. The shares were 2p off at 345p.