Here's Why Ferro (FOE) Stock is Jumping Today

NEW YORK (TheStreet) -- Shares of Ferro Corp. (FOE) are climbing by 9.02% to $11.85 on heavy trading volume on Tuesday morning, after the company is said to have recently received a buyout approach from private equity firm Apollo Global Management (APO).

Mayfield Heights, OH-based Ferro rejected the initial attempt, which was made within recent weeks, according to sources cited by Bloomberg. It is not clear whether Ferro will negotiate or if Apollo plans to come back with a new offer.

Ferro is a maker of chemicals for the manufacturing industry.

On Monday, activist investor FrontFour Capital Group released a letter urging the company to pursue strategic alternatives, such as a potential sale.

"We believe that Ferro would receive strong interest from both strategic and private equity buyers, at a price reflecting a significant premium to Ferro's current trading levels," the firm said in the letter, cited by Bloomgerg.

FrontFour has been an investor in the company since 2012 and has a stake of over 3% of Ferro's outstanding shares, the letter said.

Yesterday, Apollo agreed to acquire Fresh Market for about $1.36 billion. Last month, it also bought Apollo Education Group (APOL) and home-security monitoring company ADT Corp. (ADT).

About 2.38 million of the company's shares were traded by this morning, much higher than its average volume of 635,787 shares per day.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.

The primary factors that have impacted the rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.

The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and attractive valuation levels.

As a counter to these strengths, the team also finds weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and poor profit margins.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: FOE

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