Speculation about attempts by Alcan Inc. to improve on a $33 billion (U.S.) takeover bid by rival Alcoa Inc. drove the Canadian aluminum giant's shares up about 4.3 per cent yesterday – far above the offering price.
Media reports suggest Alcan has entered talks with Australia's BHP Billiton Ltd. as a way to parry Pittsburgh-based Alcoa's merger attempt, though spokespersons for both Alcan and BHP declined to comment on the rumours.
On the Toronto stock market, after trading of more than 3.4 million shares, Alcan closed up $4.28 at $92.50 (Canadian) – about $17 above Alcoa's offer.
Alcan's board of directors officially rejected Alcoa's offer on Tuesday, with Alcan CEO Dick Evans saying the company is in "ongoing discussions with third parties about various other transactions."
While suspicions about those discussions charged Alcan's stock yesterday, at least one analyst says there is nothing surprising about the reported talks with BHP Billiton.
"It confirmed what everybody was speculating," said Ian Howat of National Bank Financial Inc. "The reality is you're in play, and one of your responsibilities is to try and get the best value for your shareholders."
NDP leader Jack Layton urged Ottawa to insist that Canada receive a "net benefit" for any takeover, including protection of current jobs, new employment through expansion of secondary manufacturing processes and a head office guarantee.
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