Arconic shares fell 25 percent on Tuesday after the aluminum products maker said it was no longer pursuing a sale of the company, following reports that it was in talks with Apollo Global Management to sell itself for more than $10 billion.
The negotiations with Apollo ended on Monday after Arconic’s board rejected a fully financed $22.20 per share bid for the company, saying the offer was inadequate, people familiar with the matter said.
Apollo had initially offered more for Arconic, but lowered its offer as its due diligence revealed potential legal liabilities, the sources said.
The liabilities were related to the role of the company’s Reynobond PE panels used in the cladding of the London’s Grenfell Tower apartment complex, where more than 70 people were killed in 2017 in a blaze.
“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,” Arconic Chairman John Plant said in a statement.
Up to Friday’s close, Arconic shares had risen about 17 percent since July 13, when it was first reported that the company was drawing takeover interest from private equity firms.
Shares of Arconic, which counts world’s top planemakers Boeing and Airbus among its customers, were last trading down 19 percent at $16.52 before the bell.