Arconic Makes the Case It Was Right to Reject Buyout Offer
Aerospace component manufacturer Arconic (NYSE: ARNC) took a lot of heat in January when its board nixed a potential sale of the company, with shares falling more than 20% on the announcement. It's true the private equity buyers were looking to do a deal on the cheap, but given Arconic's brief, tumultuous history as an independent, there were no guarantees the company would be able to extract significant value on its own.
In the months that have followed the rejection, Arconic and its new leadership team have gone a long way toward validating the decision to go it alone. The company has taken decisive steps to bring down costs and improve operations, which has led to improved quarterly results and a recovering stock that today trades above the rumored buyout price.
Ultrasonic testing of an aerospace plate at an Arconic facility. Image source: Arconic.
Source Fool.com
