-=Arconic (ARNC) walks away from Apollo's (APO) buyout offer

(Bloomberg) -- Arconic Inc. tumbled the most in eight months as the board rejected a sale of the company, scuttling a highly anticipated deal that would have ranked among the biggest leveraged buyouts since the global financial crisis.

Apollo Global Management had been in talks to buy the maker of aerospace and auto parts for $22.20 a share, valuing Arconic at about $10.7 billion, according to people familiar with the matter. The private-equity firm had secured financing for the offer, which included coverage of potential liabilities related to London’s deadly 2017 Grenfell Tower fire, the people said.

The collapse of the negotiations deepens uncertainty surrounding Arconic, which during the last two years has fought a proxy battle with activist investor Elliott Management Corp., replaced its CEO and drawn unwanted attention for its connection to the London tragedy. The focus now will shift to operational improvements and the previously announced sale of the building-systems unit, Arconic said in a statement Tuesday.

“We did not receive a proposal for a full-company transaction that we believe would be in the best interests of Arconic’s shareholders and other stakeholders,” Chairman John Plant said in the statement. Arconic declined to comment further. Apollo declined to comment.

Arconic plummeted 16 percent to $17.16 at 12:37 p.m. in New York after falling as much as 21 percent, the biggest intraday drop since April 30. The shares tumbled 38 percent last year, while a Standard & Poor’s index of industrial stocks dropped 15 percent.

Tumultuous History

The abandonment of the buyout extends Arconic’s brief but tumultuous life as an independent company since splitting with aluminum producer Alcoa a little over two years ago. Chief Executive Officer Chip Blankenship, who took the reins early last year, has been conducting a strategic and portfolio review to address what he has called disappointing execution.

The fallout from the London fire, which killed more than 70 people, had been a sticking point in the negotiations with Apollo, Bloomberg News previously reported. The firm, which had emerged as the front-runner after topping an offer from rival private-equity investors, was working to protect itself from ongoing liabilities.

While reports of private-equity interest had buoyed Arconic, the shares still suffered last year as the company weathered poor performance and rising aluminum prices.

Blankenship, a former General Electric Co. executive, put Arconic’s Building and Construction Systems unit up for sale in July as part of the portfolio review. He also agreed to move the company’s headquarters out of New York to help cut costs.

While the sale’s cancellation may “result in a longer time horizon to recognize increased shareholder value,” Arconic still has plenty of options, according to a client note from Jefferies analysts. The building-systems sale, cost-reduction efforts and improving end markets are likely to buoy the company, they said.

Arconic (ARNC) to be acquired by Apollo Global Management (APO)?

(Bloomberg) -- Apollo Global Management LLC is in talks to buy Arconic Inc. for about $22 a share in a deal that could be reached by mid-January, according to people familiar with the matter.

The private equity firm and aerospace manufacturer are negotiating a transaction that would protect Apollo from Arconic’s possible liability tied to a deadly apartment fire in London in 2017, said the people, who asked to not be identified because the matter isn’t public. The final price is still being negotiated and talks could fall apart, they said.

Arconic discontinued sales of the aluminum panels used on the Grenfell Tower after the blaze amid reports they were a fire hazard. The company would spin off its cladding business -- the entity that made the panels -- as part of a deal with Apollo, the people said.

Elliott Management Corp. would purchase a majority interest in the cladding business, which would be recapitalized and insured as part of the spinoff, the people said. Separately, the New York-based hedge fund would roll over its 10.7 percent stake in Arconic as part of the take-private transaction with Apollo, they said.

Obstacles to reaching an agreement could include securing financing and further stock market volatility, which has dampened prices, one of the people said.

Representatives for Elliott, Arconic and Apollo declined to comment.

Apollo emerged as the leading bidder for Arconic after trumping an offer from a rival group of private equity investors, people familiar with the matter said in December. The privatization would cap a brief but tumultuous period of independence for Kingston, New York-based Arconic, which makes aircraft and automotive parts.

Since splitting from Alcoa Corp. in 2016, Arconic fought a proxy battle with Elliott and replaced its chief executive officer.

Arconic rose about 10 percent -- its largest intraday gain since July -- to $18.50 at 3:49 p.m. in New York trading, giving the company a market value of about $9 billion. Its shares had fallen about 37 percent in the past year before Wednesday’s gains.

Arconic, under Chief Executive Officer Chip Blankenship, put its building and construction systems unit up for sale in July. It also agreed to move its headquarters out of New York City to cut costs.

-=Arconic (ARNC) reported earnings on Mon 30 Apr 2018 (b/o)

NEW YORK (AP) _ Arconic Inc. (ARNC) on Monday reported first-quarter profit of $143 million.

On a per-share basis, the New York-based company said it had profit of 29 cents. Earnings, adjusted for one-time gains and costs, were 34 cents per share.

The results beat Wall Street expectations. The average estimate of four analysts surveyed by Zacks Investment Research was for earnings of 32 cents per share.

The maker of engineered products for the aerospace and other industries posted revenue of $3.45 billion in the period, also exceeding Street forecasts. Three analysts surveyed by Zacks expected $3.33 billion.

Arconic expects full-year earnings in the range of $1.17 to $1.27 per share, with revenue in the range of $13.7 billion to $14 billion.

Arconic shares have decreased 18 percent since the beginning of the year. The stock has decreased 18 percent in the last 12 months.

-=Arconic (ARNC) reported earnings on Mon 5 Feb 2018 (b/o)

Arconic beats by $0.07, beats on revs; guides FY18 EPS below consensus, revs above consensus; announces $500 mln buyback and $500 million early debt reduction; CEO reviewing strategy and portfolio; relocating HQ out of NYC

• Reports Q4 (Dec) earnings of $0.31 per share, excluding non-recurring items, $0.07 better thanthe Capital IQ Consensus of $0.24; revenues rose 10.2% year/year to $3.27 bln vs the $3.08 bln Capital IQ Consensus, driven by higher volumes across all segments and higher aluminum prices. Fourth quarter 2017 organic revenue was up 6% year over year. Fourth quarter 2017 Consolidated adjusted EBITDA was $436 million, up 54% year over year. Consolidated adjusted EBITDA excluding special items was $446 million, up 24% year over year. Consolidated adjusted EBITDA margin excluding special items was 13.6%, up 150 basis points year over year, including a 190 basis point negative impact of higher aluminum prices, last-in-first-out (LIFO) and metal lag. EP&S reported revenue of $1.5 billion, an increase of 6% year over year, and Adjusted EBITDA of $296 million, up $31 million year over year. GRP reported revenue of $1.2 billion, an increase of 15% year over year. Organic revenue was up 7%. Adjusted EBITDA was $124 million, up $8 million year over year, driven by strong automotive volume and net cost savings, partially offset by reduced aerospace wide-body build rates, airframe destocking, pricing pressure in regional specialties, and the planned Tennessee Packaging ramp down.
• Co issues mixed guidancefor FY18, sees EPS of $1.45-1.55, excluding non-recurring items, vs. $1.58 Capital IQ Consensus Estimate; sees FY18 revs of $13.4-13.7 bln vs. $13.05 bln Capital IQ Consensus Estimate. 
• Arconic's Board of Directors has authorized a share repurchase program of up to $500 million of its outstanding common stock and a $500 million early debt reduction.
• Chip Blankenship, who officially joined the Company on January 15, has initiated a review of Arconic's strategy and portfolio. The Company expects to complete this review by the end of the year.
• As part of the Company's continued drive to reduce corporate overhead, Arconic announced that it will relocate its global headquarters in 2018 out of New York City to a more cost-effective location 

=Arconic (ARNC) reported earnings on Mon 24 July 2017 (b/o)

Arconic beats by $0.06, beats on revs; raises FY17 EPS and revs guidance, in-line :

• Reports Q2 (Jun) earnings of $0.32 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.26; revenues rose 0.8% year/year to $3.26 bln vs the $3.18 bln Capital IQ Consensus
  • All segments delivered higher volumes while maintaining focus on cost reduction savings. Annualized return on net assets was 8.7% based on the results of the first half of 2017.
• Co raised guidance for FY17, sees EPS of $1.15-1.20, excluding non-recurring items, vs. $1.16 Capital IQ Consensus Estimate, from $1.10-1.20; raises FY17 revs guidance to $12.3-12.7 bln vs. $12.43 bln Capital IQ Consensus Estimate, up from $11.8-12.4 bln.

Arconic (ARNC)

• On November 1, 2016, Alcoa Inc. (AA) split into two new entities: Alcoa Corporation (AA), which is engaged in the mining and manufacture of raw aluminum, and Arconic (ARNC), which focuses on the higher-margin business of producing parts for airplanes, cars and the oil and gas industry.
• Arconic-made panels blamed for spreading Grenfell Tower fire in London, where 79 people died in a blaze in June, 2015.  It was the deadliest fire in Great Britain since the Second World War.  (The fire started with a Whirlpool (WHR) refrigerator but quickly spread to the cladding. Note: The Hotpoint refrigerators were made by the Italian company Indesit, which was acquired by Whirlpool in 2014.)

  

• Grenfell Tower fire in London; North Kensington, London, Britain June, 2017.

  

To save money Grenfell's cladding was switched from less flammable zinc to aluminium
The change saved £293,368 and was part of a list of requested savings on the refurbishment
One of the lead contractors constructing the tower boasted on its website that the project had been completed at £1m under budget.

Arconic said in a statement that it had known the panels would be used at Grenfell Tower but that it was not its role to decide what was or was not compliant with local building regulations.

The company manufactures three main types of Reynobond panel-- one with a polyethylene (PE) core, one with a fire retardant core and another with a non-combustible core, according to its website.

Diagrams in a 2016 Arconic brochure for its Reynobond panels describe how PE core panels are suitable up to 10 metres in height. Panels with a fire resistant core -- the FR model -- can be used up to 30 metres, while above that height, panels with the non-combustible core -- the A2 model -- should be used, the brochure says.

Grenfell Tower is more than 60 metres tall.

The brochure also issued a blunt warning that cladding can be a fire risk.

Harley Facades Ltd., the company which installed the panels, Rydon Group, the overall contractor on the 2014-2016 Grenfell refurbishment, and the local authority, the Royal Borough of Kensington and Chelsea, which owns the tower block all declined to comment.

Rydon previously said in a statement that its work on the refurbishment of Grenfell Tower, which was intended to give the building better heat and sound insulation, complied with all building regulations. Harley said last week it was "not aware of any link between the fire and the exterior cladding to the tower".