Ashland shares jump on report of activist stake, sale push

Investing.com -- Ashland Inc shares quickly rose more than 6% in midday trading Tuesday following a Reuters report that activist investor Ancora Alternatives has taken a stake in the specialty chemicals company and is pushing for a sale.

The Cleveland-based hedge fund is said to have built a position in the Wilmington, Delaware-based company and believes a sale could lift the share price by at least 30%.

Ancora is also reportedly prepared to launch a proxy fight if no progress toward a deal is made by the time the director nomination window opens in September.

The hedge fund began accumulating its stake in April after Ashland's stock declined following disappointing fiscal second-quarter earnings.

Ashland's stock has fallen roughly 50% since reaching a peak in December 2022 and now trades near $57.50. The company currently has a market value of $2.7 billion.

Ancora projects that a sales process could push the stock to at least $76 per share, representing a 31% increase from current levels. The hedge fund said investors are valuing the company below what its standalone business segments would be worth.

"A sale is the best path to realizing Ashland's intrinsic value in the face of the company's significant trading discount and near-term growth and execution issues," the presentation reportedly said. "Ashland is an attractive asset to a deep pool of strategics and financial sponsors alike."

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