Arconic, Elliott talking spinoff deal

Arconic, working with Elliott Management, is in talks to buy the unit of the company that has the liabilities associated with the London Grenfell Tower disaster in order to sell the rest of the business, sources said.

The plan is to spin off the troubled aluminum construction unit to Arconic and its largest shareholder, Elliott, while selling the rest of Arconic to an outside buyer, sources said.

Arconic is asking for final bids on the business minus the construction division Friday, sources said. The plan will be contingent on Arconic and Elliott coming to an agreement on buying the construction division.

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 a 24story residential building in West London. The disaster left 72 people dead.

Arconic is putting money from its balance sheet into the purchase of the construction division, sources said.

Suitors for Arconic have demanded that liabilities from the fire be ringfenced as a condition for any bid.

Once the Arconic and Elliott plan is fixed, they want to have the deal for rest of the company signed at the same time, by mid-December, sources said.

A Carlyle Group- and Blackstone Group-led team of buyers, and Apollo Global Management, are both expected to bid for Arconic if they do not have to assume the Grenfell liabilities, sources said.

Elliott and Arconic declined comment.