The board of aluminum company Alcan (NYSE: AL) has rejected a purchase offer from rival Alcoa (NYSE: AA) as inadequate, despite the fact that it took Alcan's share price from $59 to well over $81.
Alcoa's theory was that, with both companies in the same business, there would be a lot of cost cutting in the merger and perhaps greater price leverage with customers. The logic seemed to make sense.
Alcan's price rose above the Alcoa offer, so the markets assumed that another company might jump in. It turns out that was probably right. News reports say that Australian metals giant BHP Billiton (NYSE:BHP) is in talks to buy Alcan. According to MarketWatch, the head of BHP as recently said that the world's top miner would consider acquisitions that add shareholder value.
Another overseas mining company, Rio Tinto (NYSE: RTP) has been mentioned as a suitor for Alcan as well.
At least the company has a full dance card.
Douglas A. McIntyre is a partner at 24/7 Wall St.
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Reader Comments (Page 1 of 1)
5-25-2007 @ 4:22AM
gumby said...
Why was everyone saying Alcoa is worth only $45 when Alcan soared to 85 or so. Now it means that Alcoa is worth over 55 or so. It doesnt matter who wins Alcoa or BHP or PacMan!!! it just means that Alcoa is very cheap. Waht are you waiting for?
5-25-2007 @ 11:49AM
gumbo said...
BHP AND RIO TINTO ARE UP TO THEIR EYES IN HEAVY CAP EX ALCAN WILL SOON FIND OUT... WHO DO ALCAN TURN TO NOW? RUSAL? HAHAHAHAHAH