Why Owens Corning Stock Rocked the Market This Week
Key Points
Carlisle has apparently made several approaches to acquire the business.
It was offering a mix of cash and stock, according to a media report.
Owens Corning (NYSE: OC), a storied company though rarely an investor darling, was a popular stock on the exchange in the holiday-shortened trading week. That was traceable to a media report that stated the company had received a buyout offer. According to data compiled by S&P Global Market Intelligence, Owens Corning's equity zoomed almost 11% higher over the four-day stretch.
A big deal, if it's agreed
Owens Corning, a construction supplies company perhaps best known for its pink residential insulation products, was the target of an unsolicited bid from industry peer Carlisle.
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That's the assertion of The Wall Street Journal, which published an article stating that Carlisle made a series of bids, at least one of which valued a deal at well over $10 billion. Citing unidentified "people familiar with the matter," the financial newspaper added that Owens Corning hasn't yet "engaged substantially" with its apparent suitor.
According to the article's sources, Carlisle was considering its next move in the effort. The WSJ said that its offers consisted of a mix of cash and stock.
Neither company has yet officially commented on the report.
Potent combination
On paper, it makes a great deal of sense to combine these two complementary businesses.
But if the article is accurate, Owens Corning could either be holding out for a higher price or shunning Carlisle entirely -- it recently retooled its business strategy, and management might be waiting for the change to take effect before evaluating the company's future. Given all that, I wouldn't trade into or out of Owens Corning on this speculation.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Carlisle Companies and Owens Corning. The Motley Fool has a disclosure policy.