Fresh on the heels of rebuffing a $10 billion takeover deal that was pushed by Paul Singer, aluminum giant Arconic is once again thumbing its nose at the hard-charging billionaire.
The New York-based company shocked Wall Street on Friday with a surprise announcement that it’s splitting into two companies.
While details of the plans were sparse, one thing was clear: The split will seriously complicate any attempt to sell the company.
“After a rigorous and comprehensive process, we did not receive a proposal for a full-company transaction that we believe was in the best interests of our shareholders,” Arconic’s chairman and newly named chief executive, John Plant, said in a statement Friday.
Singer’s hedge fund Elliott Management — which had been prodding Plant and the rest of Arconic’s board to accept a $22.20-a-share buyout offer from billionaire Leon Black’s buyout firm Apollo Global Management — isn’t likely to wage a proxy fight to force a sale, sources told The Post.
The deadline for nominating new directors is next Friday.
Arconic shares lost 3.3 percent on Friday, to close at $17.10.
As reported by The Post, Plant had been the target of a bizarre prank in which bankers handed out his cell-phone number to shareholders, asking them to give Plant an earful about rejecting the Apollo bid.
But earlier this week, Plant replaced Chip Blankenship, widely seen as an Elliott ally, to become the company’s fourth CEO in four years.
“The board sees more shareholder value creation through a restructuring of the company,” Plant added in his Friday statement.
Arconic offered few specifics about its split, saying that it plans to separate its aluminum sheet business and engineered products divisions and spin off one of them. It will also sell assets that don’t fit within the two business lines.
Plant, who agreed to stay on as CEO for a year, said on a call with analysts that he expects the spinoff would occur within nine to 15 months.
In addition to the proposed split, Arconic announced plans to cut costs by $200 million. It announced $1 billion in share repurchases, split between this year and next, while also slashing its quarterly dividend by two thirds to 2 cents a share.
Arconic has courted controversy since its split from Alcoa in 2016.
Elliott launched a proxy battle against the firm early in 2017, pushing for board changes and the exit of CEO Klaus Kleinfeld.
Kleinfeld was ousted in 2017 after sending Elliott’s Paul Singer a letter that was interpreted as “a threat to intimidate or extort” the hedgie.
Plant was forced to defend the rapid succession of four CEOs over the last two years when an analyst asked: “What happened?”
“To carry us forward — to carry out the direction that I’ve talked to this morning, the board felt it appropriate to make not only, I’d say, a new direction in terms of the strategic intent of the company, but also it’s appropriate to make a change in leadership,” Plant said.