Arconic Corp. (ARNC) investors got a pleasant jolt this past week after The Wall Street Journal reported the aluminum products company was in talks to be acquired by private-equity firm Apollo Global Management (APO). Despite a big gain, the stock still looks like a buy.

The Journal reported Apollo (ticker: APO) submitted a bid in February at a “significant premium” to recent levels. Apollo didn’t respond to a request for comment, while an Arconic spokesperson said the company doesn’t comment on rumor or speculation. But many takeout offers start at about a 20% premium to a stock’s 30-day moving average which implies a price for Arconic (ARNC) of around $28 a share. It makes sense, then, that shares would jump about 30% off Tuesday’s lows and close at $27.20 on Friday.

What’s surprising is that there may be more gains ahead. “There is more upside beyond the price attributed based on the talks with Apollo,” says Jim Osman, founder of the Edge, a firm that specializes in research about spinoffs and special situations. He identified Arconic as a potential takeout candidate in a February 2023 report.

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