Shares in Owens-Illinois Inc. rose nearly 9% on the morning of 12 January 2007 on news of the possible sale of the firm's plastics business. Shares rose 8.6 %, or USD 1.73, to USD 21.87 on the New York Stock Exchange. The stock has traded between USD 13.10 and USD 22.60 over the past 52 weeks. Owens-Illinois announced it is considering the sale of O-I Plastics, which makes plastic prescription bottles, tamperproof closures and plastic medical devices."Our plastics business is a very attractive franchise", said Albert P.L. Stroucken, chairman and chief executive. "We are conducting this review to explore ways of maximizing value for our shareholders". The company said O-I Plastics posted revenue of about USD 770M in fiscal 2006. Bank of America Securities analyst George L. Staphos said the announcement was "positive on first blush". Mr. Staphos said selling the plastics arm would likely reduce the company's leverage and risk. He added that the news confirms that Mr. Stroucken, who took over in December 2007, was "reviewing all options and turning over all stones to improve OI's performance and valuation". Wachovia analyst Ghansham Panjabi agreed that the possible sale was a testament to Mr. Stroucken's willingness to make changes. "While the company has lacked discipline in the past as it relates to free cash flow allocation, we note that a new management team, on top of recent portfolio re-jiggering, has positioned the company on a solid footing over the next few years, in our view", Mr. Panjabi said. Owens-Illinois makes glass bottles for the food and beverage industry. The company numbers brewer Anheuser-Busch and food maker HJ Heinz Co. among its clients.
