April 8 (Bloomberg) -- Rockwell Automation Inc. jumped the most since October and trading of bullish options surged to a record on speculation that the world’s largest maker of factory- automation equipment may be acquired.

“The stock is moving higher and calls are active on takeover speculation,” said Frederic Ruffy, the senior options strategist at WhatsTrading.com, a New York-based provider of options-market analysis. “The talk is that Emerson Electric may make a bid for the company.”

Rockwell added $3.24, or 14 percent, to $26.87 at 4:15 p.m. in New York Stock Exchange composite trading, the biggest gain since Oct. 13. Trading of call options increased to a record 24,286 contracts, or 65 times the four-week average.

The most-active contracts were April $30 calls, which jumped more than fivefold to 55 cents for the biggest gain among Rockwell options. A buyer at that price breaks even if the stock rises above $30.55 before this month’s options expire April 17. Calls give the right to buy a stock for a set amount by a given date.

“It’s definitely speculative buying based on the possibility of a takeover,” said Rich Gatto, an options trader at Meridian Equity Partners Inc. in New York. “We’ve heard multiple rumors of buyouts this week and haven’t seen much happen.”

John Bernaden, a spokesman for Milwaukee-based Rockwell, said the company doesn’t comment on market speculation.

Remaining Independent

“The highest value for Rockwell Automation shareholders will be realized by Rockwell Automation remaining an independent company and executing our growth and performance strategy,” he said.

Mark Polzin, a spokesman for St. Louis-based Emerson Electric Co., declined to comment on today’s trading. Emerson shares slipped 7 cents, or 2.5 percent, to $30.12.

Emerson is close to reaching its goal of doing $1 billion in acquisitions this year, Chief Executive David Farr said on an April 7 conference call with analysts after the company slashed its profit forecast, according to a transcript of the call. The company expects to do “marquee acquisitions,” he said.

Emerson is “getting close to $900 million of acquisitions already” Farr said. “And I think, based on what we reviewed with the board today, we will continue to move forward.”

Rockwell today declared a regular quarterly dividend of 29 cents a share, payable June 10 to shareowners of record May 18.

To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Rachel Layne in Boston at rlayne@bloomberg.net.

Last Updated: April 8, 2009 16:42 EDT