Alcoa Sidesteps Board Room Battle

Alcoa Inc AA added three new directors to the board to avoid a boardroom battle with Elliott Management. The hedge fund says it supports the plan to split Alcoa into two. Elliott owns 7.5%.

Alcoa is adding to the board .... former CFO of Spirit AeroSystems, former CEO of TRW Automotive and former i-banker / director at Delphi.

Here's the Elliott thesis for Alcoa: "The market is undervaluing its manufacturing business because of the metal price rout." The activist investor has been talking with the company about the spinoff and other options for boosting value. The big idea is that after the split, Elliott wants to see Alcoa sell off its power generation assets.