Metal Stocks Rise Worldwide; Alcan Gains on Report of Norsk Bid

Metal and mining stocks rallied worldwide on speculation that global demand for commodities and higher raw-material prices may fuel more takeovers.

Alcan Inc. climbed on a Globe and Mail report that Norsk Hydro ASA is preparing a bid of more than $30 billion for the world's second-biggest aluminum company, trumping Alcoa Inc.'s offer. BHP Billiton Ltd., the largest mining company, and Arcelor Mittal, the biggest steelmaker, also advanced.

Asian and European stock markets rose today. U.S. equity futures gained as the main exchanges closed for Memorial Day. The CSI 300 Index climbed above 4000 for the first time in China, where copper prices surged by the limit for the third time this month as economic growth boosts demand for raw materials.

``It's clear that demand remains strong and that certainly is an influence on the share prices,'' said Eric Taze-Bernard, who oversees $1.3 billion as chief investment officer at Invesco Gestion in Paris.

The Globe and Mail reported today that Oslo-based Norsk Hydro, which produces about 4 percent of the world's aluminum, is considering making an offer for Alcan that would exceed the one made by Alcoa, the world's biggest aluminum company, on May 7. Alcoa's offer of $58.60 in cash and 0.4108 of an Alcoa share for Alcan is valued at $27.7 billion based on Alcoa's closing price on May 25.

Rio Tinto Group, the world's third-largest miner, has also hired Deutsche Bank AG to advise it on a possible Alcan bid, the Age newspaper reported, without citing anyone. Norsk Hydro spokesman Thomas Knutzen and Rio Tinto spokesman Nick Cobban, contacted by telephone today, declined to comment.

Alcan Rallies

``Alcan is driving the materials sector higher. It's a jewel and there aren't too many companies like it beyond Alcoa,'' said Andrew Pyle, head of capital markets research for Scotia Capital in Toronto. ``Despite talk about a slowdown in North America, global economic growth is solid and that is driving up demand for metals.''

Alcan, which rallied 2.8 percent to C$94.25 in Toronto, helped lift Canada's Standard & Poor's/TSX Composite Index for a second day.

In Latin America, Brazil and Chile advanced on speculation that metal prices will remain high on global economic growth.

Copper prices rose by the limit for the third time this month in Shanghai, following a drop in stockpiles and signs of continued demand from China, the world's biggest user of the metal. Zinc and aluminum also gained. The metals weren't traded on the London Metal Exchange today because of a public holiday.

Europe

Nine of the 18 western European markets, including the U.K. and Germany, were also closed. MSCI's Euro Index gained 0.2 percent in London.

France's CAC 40 rose 0.2 percent, paced by Arcelor Mittal. Shares of Arcelor, the world's largest steelmaker, increased 0.8 percent to 43.65 euros. Norsk-Hydro, an energy and metals producer, gained 0.4 percent to 26.10 euros in trading in France. The Norwegian stock market, where Norsk Hydro normally trades, was closed.

Elsewhere in Europe, Italy's S&P/MIB advanced 0.3 percent and Spain's IBEX rallied 0.4 percent. Banca Monte dei Paschi di Siena SpA led European banks higher on speculation it may receive a bid.

Banca Monte climbed 1.6 percent to 5.17 euros in Italy. The bank may choose a merger partner ``this summer,'' Gabriello Mancini, president of Fondazione Montepaschi di Siena, the bank's largest shareholder, told Corriere della Sera.

``Banks have the support of the M&A dynamic,'' said Invesco's Taze-Bernard. ``There's a lot of movement in the industry.''

OMX Climbs

Sweden's OMX AB rallied after a report that the Dubai International Financial Centre, a state-run, tax-free, business park in the United Arab Emirates, may bid for the stock exchange operator, trumping an offer by Nasdaq Stock Market Inc.

Shares of OMX jumped 8.3 percent to 216 euros. Dubai International Financial Centre hired HSBC Holdings Plc to adv