(Updates with closing share price in second paragraph.)
Nov. 17 (Bloomberg) -- Rexam Plc, a maker of drinks cans and packaging materials, rose the most in three weeks in London trading after saying it may sell its Personal Care division and return the cash to investors.
Rexam advanced 2.4 percent to 332.80 pence by the close in London, the biggest gain since Oct. 27. The stock was the third best performer in the FTSE 100 index, which dropped 1.6 percent.
“Performance in Personal Care continued to be weak” in the third quarter, the London-based company said today in a statement. “We are now exploring all options for this segment of Plastic Packaging, including divestment.”
A disposal of the unit would follow the sale of Rexam’s unprofitable closures unit to Berry Plastics Corp. for $360 million, which was completed on Sept. 1. The proceeds reduced net debt to 1.4 billion pounds ($2.2 billion) at the end of the third quarter, the company said in today’s statement.
Rexam, the largest maker of drinks cans, said its can volumes in Europe have risen about 5 percent this year, compared with a 4 percent expansion in the market. A sale of the Personal Care unit may enable the company to make acquisitions, or return the cash to shareholders through dividends or buybacks, Chief Executive Officer Graham Chipchase said on a conference call.
Rexam, which operates in the U.S., Latin America, Asia and Europe, is seeking to expand in Brazil, where it plans a factory with a production capacity of 1.2 billion cans a year.
It’s also investing about 30 million pounds over two years to raise output at the Taloja can plant near Mumbai. The new line, which will start in the fourth quarter of next year, will produce 400 million to 950 million cans annually.
--Editors: Tony Barrett, Randall Hackley
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