Exclusive: Elliott steps in to boost Arconic's sales process – sources

(Reuters) – Elliott Management Corp, the activist hedge fund that is part of the Arconic Inc. group (ARNC.N) board of directors, intervened to badume potential liabilities weighing on the sales process of the American manufacturer of aluminum products, according to people familiar with the subject.

Elliott's decision comes after Arconic has rejected an offer of more than $ 11 billion from Apollo Global Management LLC (APO.N) as inadequate. Elliott hopes his intervention will help Arconic get a higher price, sources said Thursday.

Arconic shares rose 3.1% to 21.48 dollars, giving the company a market capitalization of nearly $ 10.5 billion.

Potential legal requirements come from Arconic's Building Systems Division, which manufactures products for façades, windows and frames. Its Reynobond PE panels were used in the lining of the Grenfell Tower apartment complex in London, where more than 70 people were killed by fire.

Elliott proposed to resume Arconic's coating operations and to include its 11% in the company's winning bid, the sources said. This will allow Elliott to keep its equity in the company while other shareholders get cash.

Arconic has applied to Apollo, along with a buy-out consortium led by Blackstone Group LP (BX.N) and Carlyle Group LP (CG.O), to submit new offers for the company Friday, sources said. Arconic's board is planning to meet next week to review the offers, added one source.

The sources asked not to be identified because the case is confidential. Arconic, Blackstone and Carlyle did not immediately respond to requests for comment, while Elliott and Apollo declined to comment.

An agreement for Arconic would be one of the largest leverages of the year. That would come after this year's US President Donald Trump imposed tariffs on aluminum that would have increased costs for Arconic, a manufacturer of aluminum components for cars and planes.

Arconic, from Alcoa Corp. (AA.N) in 2016, announced in February its intention to carry out a "strategy and portfolio review". In its third quarter earnings release, last month announced that it was "expanding the scope and duration of this activity to take into account new scenarios," and that it planned to complete its review. in the fourth quarter.

Arconic announced a quarterly profit above expectations last month and raised its earnings guidance for the year, driven by the increased demand for aluminum parts used by its aircraft customers, including Boeing Co (PROHIBIT) and Airbus SE (AIR.PA).