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.