Alcoa Plans 1-for-3 Reverse Stock Split Before Separationby
Number of common shares would decrease to 600 million
The 128-year-old aluminum producer is dividing itself into two
Alcoa Inc., the biggest U.S. aluminum producer, will undertake a reverse split of common stock at a ratio of 1 for 3 before it proceeds with a previously announced separation.
The stock split will reduce the number of Alcoa shares outstanding and “is expected to increase the per-share trading price of the common stock, which may improve liquidity and facilitate its trading,” the New York-based company said in a statement Wednesday.
The 128-year-old aluminum producer is dividing itself into two companies: one holding its legacy smelting business and another its car and jet parts businesses. It will seek shareholder approval for the stock split on Oct. 5. The number of authorized shares of common stock would decrease to 600 million from from 1.8 billion.
“Stock splits are a bit cosmetic,” Justin Bergner, a Rye, New York-based analyst at Gabelli & Co., said by telephone. “There’s no impact on any sort of fundamental aspect to the stock.”
The reverse stock split won’t change the proportionate equity interests or voting rights of holders of common stock, it said. Holders as of the close of business on Aug. 3 will be entitled to notice of and to vote at the meeting.
Shares of Alcoa were little changed at $10.74 after the close of regular trading on Wednesday.