BHP Billiton may not make Alcan bid

Even if BHP Billiton Ltd has appointed advisers to put Alcan Inc under the microscope, analysts say it doesn't mean the world's biggest miner will end up putting in a bid for the Canadian aluminium producer.

Alcan in May rejected a $US27 billion ($A33.03 billion) takeover offer from its closest competitor, US rival Alcoa, saying it was in talks with other parties and sparked frenzied speculation over the identities of other potential predators.

Recent reports indicate BHP Billiton has signed investment bank Merrill Lynch & Co to look at Alcan, while fellow mining giant Rio has reportedly appointed Deutsche Bank, with both declining to comment on the speculation.

Other names thrown into the mix as possible bidders for Alcan include Companhia Vale do Rio Doce, or CVRD, the world's second biggest mining company, Swiss-based Xstrata Plc and UK-based Anglo American Plc.

A separate story in a London newspaper pegged BHP Billiton to a possible tilt at Alcoa.

ABN Amro analyst Rob Clifford said that some of the reports may have some truth to them.

"If Alcan is opening up their data room to try to get a white knight in, then BHP would be foolish not to go in and have a look, regardless of their intentions, really," he said.

But he remains sceptical that any bid will emerge from BHP Billiton.

"BHP would have been looking at Alcoa and Alcan for years - they look at all potential acquisitions," Mr Clifford said.

"So you have got to ask yourself, given that they haven't bought Alcan or Alcoa over the last couple of years, what is it now that makes them attractive?"

Mr Clifford explained that this was even more poignant given the sharp rises in the value of Alcan and Alcoa's shares.

"What is in that gets them over the line? The aluminium price has been good, it has doubled, but it hasn't had the same run that the nickel price has, which has quintupled," he said.

"It is hard to imagine that they (Rio Tinto or BHP) have suddenly got more bullish on aluminium to the extent that they can justify paying somewhere between 40 to 80 per cent more, at least, for these stocks over and above what they would have had to pay 12 months ago."

Shaw Stockbroking analyst John Colnan agreed with Mr Clifford's assessment, adding that the advisers may have been appointed for other reasons.

"Big companies have corporate advisers ongoing - they might have three or four corporate advisers continuously," he said.

"Just because a broker has been appointed, the corporate adviser could be working on something else."

Mr Colnan said that if it does bid, BHP Billiton may not go it alone.

"Alcan has a lot of downstream businesses that BHP wouldn't be interested in, so if BHP is looking at the group and serious, it might be in conjunction with a couple of other parties and they split the company," he said.

"BHP and Rio, their acquisitions are typically of strategic importance and fit within commodity groups where they can have substantial cost savings.

"So if they can't see that out of Alcan ... but that won't stop them having a look."

Australian aluminium producer Alumina Ltd also has a lot at stake in any battle that erupts for Alcoa, with its 40 per cent ownership Alcoa joint venture, Alcoa World Alumina and Chemicals (AWAC), the world's largest alumina business.

Market watchers say that should a takeover of Alcoa take place, the successful shopper may seek to take over Alumina to gain complete control of the joint venture.

BHP closed up 24 cents at $34.92 on Tuesday. Rio closed $1.16 higher at $101.15, while Alumina finished four cents down at $8.00.