Elliott Management Boosts Stake in Alcoa as Breakup Loomsby
Elliott Management Corp., the activist fund founded by Paul Singer, boosted its stake in Alcoa Inc. as the biggest U.S. aluminum producer prepares to split into two companies.
Elliott increased its ownership of New York-based Alcoa to 7.4 percent. In November, the New York-based hedge fund disclosed a 6.4 percent holding, saying it believes the split-up plan will unlock value.
Alcoa is planning to separate its mining, aluminum-producing and energy assets from segments that roll and form the metal into components for aircraft, cars and trucks and building products. The split, which was announced in September, is scheduled to be completed in the second half of this year. A global glut has sent the price of aluminum to near a six-year low, while Alcoa expects demand for aluminum products to grow by 6 percent this year.
“Alcoa values constructive communications with its shareholders with the goal of enhancing value,” Monica Orbe, an Alcoa spokeswoman, said in an e-mail.
Elliott, which has sought changes at major companies including Hess Corp. and Samsung Group, built up the Alcoa stake on the assumption that the market was undervaluing its manufacturing business because of the metal price rout, people familiar with the transaction said in November. The company’s shares fell 37 percent in 2015.
Alcoa declined 0.4 percent to $6.84 at 3:25 p.m. in New York.