U.S. News

Quanex Shares Soar on Spin-off Comments


Quanex said it was exploring alternatives for its building products group, including a tax-free spin-off, sale or joint venture, sending shares to an all-time high.

The Houston-based company , which produces steel for the auto industry and aluminum sheets for construction, has retained Lazard Freres as its financial adviser in the review.

The business generated sales of about $1.1 billion and operating income of about $135 million for the year ended October 2006. It includes engineered products, which provide window and door makers with parts, and aluminum sheet products used mostly in the building and construction market.

Quanex Chief Executive Raymond Jean said the time may be right to separate the company's main businesses. Auto products is the other major unit.

"Given their different products, processes and end markets, we believe that the time is right to explore whether separating these businesses can deliver greater value for our shareholders," he said in a statement.

The company said it does not intend to provide updates on the review until it has picked a final course of action.

Shares of Quanex rose as high as $49.34 -- an all-time intraday trading high.