Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of defense contractor and business jet maker Textron (NYSE: TXT) got a 10% boost in intraday trading Friday on news that rival aerospace firm United Technologies (NYSE: UTX) is raising cash to make a big acquisition.

So what: Rumor has it that UTC is lining up creditors to support a $20 billion purchase offer -- which makes Textron's leap all the stranger given that its market cap today is only $5 billion.

Now what: Is United Tech planning to pay a 400% premium to Textron's market cap? That would certainly be nice -- but not likely. So who is UTC planning to buy? Boeing's (NYSE: BA) too big; L-3 (NYSE: LLL) too small. General Dynamics (NYSE: GD) looks just about right, sizewise -- but if UTC's planning a hostile takeover, they'd better watch out. General D has tanks ...

My best guess is Raytheon (NYSE: RTN) or Northrop Grumman (NYSE: NOC), which carry $15 billion-ish market caps, and a decently size takeover premium could take either to $20 billion easily.

Valuation aside, what company makes the most sense for UTC to buy? Add it to your watchlist, and read along as we discuss the question.

Fool contributor Rich Smith does not own (or short) shares of any company named above.

The Motley Fool owns shares of General Dynamics, L-3 Communications Holdings, Raytheon, Northrop Grumman, and Textron. Motley Fool newsletter services have recommended buying shares of L-3 Communications Holdings. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.