Tile liability makes Arconic suitors queasy

The Blackstone Group and the Carlyle Group are now gauging the potential liability costs facing Arconic, the maker of tiles that burned during London’s Grenfell Tower fire, two sources close to the situation said.

The bidding group led by the private equity heavyweights is trying to determine the total exposure should the company face a sweeping judicial remedy requiring Arconic to replace tiles in high-rise buildings in England, Ger- many and possibly the US, a source said. Arconic stopped selling the product soon after the fire.

A unit of New York-based Arconic had supplied aluminum cladding that was partly blamed for the quick spread of the June 2017 fire in the 24story residential building in West London. The disaster left 72 people dead.

Scotland Yard is still investigating the blaze.

Until recently, it was believed that the Grenfell Tower tragedy wasn’t a major financial worry for Arconic.

But recently, prospective bidders have been told of potential liabilities related to the inferno just days before they were expected to make final bids for the company, sources said.

Meanwhile, rival Arconic bidder Apollo Global Management has made an offer nearing $23 a share, a source with direct knowledge of the offer said.

While this is under initial sale expectations, the offer is still higher than Arconic’s share price — which fell 3.1 percent Monday, to $19.22, for a $9.3 billion market cap.

On Tuesday morning, Arconic reports earnings.

Arconic hired Goldman Sachs to launch an auction this summer, and will soon need to decide whether to give the Blackstone-Carlyle group more time, enter into exclusive talks with Apollo or reverse course and not sell itself.

Blackstone, Carlyle and Arconic could not be reached. Apollo declined to comment.