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Elliott Management takes 6.5% stake in Alcoa: Sources

Paul Singer's Elliott Management will disclose a 6.5 percent stake in Alcoa, sources told CNBC on Monday.

The hedge fund supports the company's decision to split into two, the sources said, but takes issue with management's ability to deliver margin improvement of around 700 basis points.

Elliot is also pushing Alcoa to sell its power generation unit.

The aluminum maker's shares were up slightly Monday morning. (Get the latest quote here.)

CNBC's David Faber contributed to this report.