NEW YORK (AP) â¿¿ Shares of AM Castle & Co. surged Tuesday on news that billionaire investor Tom Gores' private equity firm bought a 6.1 percent stake in the metal and plastic product supplier and might be interested in buying the company.
Gores is founder and chairman of the Beverly Hills, Calif.-based private equity firm Platinum Equity. Platinum owns a variety of technology and manufacturing companies, including steel processor Ryerson Inc., which also was listed in the filing as part of the investment group buying the stake in AM Castle.
In a filing submitted to the Securities and Exchange Commission late Monday, Platinum said it made the investment in order to engage in talks with Oak Brook, Ill.-based AM Castle about possibly acquiring the company. It plans to review the company finances periodically and may choose to increase or sell off its stake at some point down the road, the filing said.
AM Castle shares rose $1.45, or 15.7 percent, to $10.67 in heavy afternoon trading, after peaking at $10.95 earlier in the session. The company's shares dropped from a recent peak of $14.20 on May 1 to a 52-week low of $6.99 on Aug. 1, and have since started to climb back.