Shares of Modine Manufacturing Co. posted their biggest one-day gain in six years after reports that Samsung Electronics Co. is in talks to buy the maker of cooling equipment for data centers, putting a price on a deal that neither company has agreed to.
The stock closed up 28% at $135.66 on Friday, lifting the market value of the Racine, Wis., company to about $7.2 billion. Before the reports surfaced late Thursday, Modine was worth roughly $5.6 billion, and its shares had fallen about 15% since it posted quarterly results on Nov. 3 that disappointed investors.
Talks, not terms
People familiar with the discussions said an agreement could be reached as soon as the coming weeks. They also said no final decision has been made, the talks could still collapse and a rival suitor could surface. No price or premium has been reported, and neither Samsung nor Modine has commented. That means Friday’s rally already reflects a takeover premium that no buyer has offered.
Activist investor Jana Partners added another wrinkle on the same day. In a quarterly holdings filing, the firm disclosed that it owned about 287,620 Modine shares at the end of September, about 0.5% of the company, as one of two new positions built during the third quarter. Jana did not say what it plans to do with the stake.
Why Samsung wants cooling
Modine has remade itself around the heat problem created by artificial-intelligence chips. In October it separated its automotive business to concentrate on thermal management, and its data center segment roughly doubled revenue from a year earlier in its latest quarter. The company recently began producing chillers at a 682,000-square-foot plant in Grand Prairie, Texas.
A purchase would give Samsung, whose profits depend heavily on memory chips, a direct stake in the physical equipment that keeps AI data centers running. Rivals including Daikin Industries, LG Electronics and Vertiv have been pushing into the same market. Shares of Vertiv slipped on Friday, a sign that investors treated the news as specific to Modine rather than a reason to bid up the whole cooling group.
The move follows other bets on the power and cooling side of the AI buildout, including Archrock’s $450 million purchase of HiVolt earlier this week.
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