Shares of cable manufacturer General Cable Corporation (NYSE: BGC) jumped as much as 12.3% in trading Monday after announcing a strategic review. At 3:50 p.m. EDT, shares were holding at a 10.6% gain on the day.
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Management announced that it has engaged investment bankers to explore strategic alternatives, including a sale of the company. In other words, management would like to sell the company if a buyer is willing to meet its price.
In the press release, management also said second-quarter revenue would be about $923 million, operating loss would be around $23 million, and adjusted operating income will be $32 million.
There's no guarantee that any sale will take place, but that's what investors have their eye on today. Management thinks the cable industry is headed for consolidation and, as a small player, wants to get out in front of the change before being trampled. That's probably a good strategy, but we'll have to see whether interested buyers emerge. For now, this is a speculative move that I wouldn't jump on, but if General Cable can find a buyer willing to pay a premium, there's a chance more upside is ahead.
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