What happened

Shares of Owens-Illinois Inc. (NYSE:OI) jumped 9.9% on Friday after activist investor Atlantic Investment Management called for the glass-container specialist to take a number of actions to maximize shareholder value.

According to an SEC filing today, Atlantic has sent a letter to Owens-Illinois management urging them to hire a financial advisor to explore the sale of their European business, arguing that "there is substantial upside to OI's share price on a sum-of-the-parts basis."

Man in business suit drawing a line indicating gains.

IMAGE SOURCE: GETTY IMAGES.

Then, Atlantic says, OI should use those proceeds to repurchase at least $1 billion in shares and pay down $2 billion or more in debt. Finally, it argues that OI should initiate a dividend of $0.15 per quarter and allocate 75% of its annual free cash flow to additional stock buybacks.

If the company does so, Atlantic believes Owens-Illinois stock could more than double to over $40 per share.

Now what

This doesn't guarantee that Owens-Illinois will follow Atlantic Investments' advice. But Owens-Illinois did acknowledge the letter in a press release today, adding that it appreciates Atlantic Investment's support and -- just as it does with all shareholders -- will take its input "seriously."

In any case, with Owens-Illinois stock down 28% in the year leading up to this development, it's no surprise to see shares rebounding today in response.

Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.