Alcan's new faces jump into fray

Alcan Inc.'s two freshly minted board members, McGill University principal Heather Munroe-Blum and Yale professor Jeffrey Garten, are in the corporate thick of things as speculation rises that there could be a bidding war for the Montreal-based aluminum producer.

Garten is on a special committee that is to consider all options for the 105-year-old firm while Munroe-Blum is among the directors mandated to safeguard a linchpin energy agreement between Alcan and the Quebec government.

All of this within weeks of being officially welcomed to the board and while markets on several continents are frothy with Alcan-related rumours.

On the New York Stock Exchange yesterday, Alcan stock hit an intraday record high of $87.11 before closing at $86, up $1 on the day, amid speculation that Rio Tinto PLC and Norsk Hydro ASA are contemplating bids to trump Alcoa Inc.'s hostile takeover bid of $33 billion U.S.

BHP Billilton Ltd. and Brazil's CVRD have also been cited in recent reports as among other possible bidders.

Although Alcan is not offering public comment about the nature or the pace of its discussions with unidentified third parties, the work must be piling up for Garten, whose impressive credentials include the fact he is the husband of Ina Garten, author of the Barefoot Contessa cookbooks and star of a Food Network cooking show.

Garten, a New York-based consultant and former White House staffer, is a member of Alcan's six-person Strategic Committee, whose mandate is to consider the Alcoa offer, along with "any other alternatives that Alcan is presented with or may choose to consider or pursue."

Chaired by Paul Tellier, former CEO of Bombardier Inc., the committee of Christine Morin-Postel, former Suez Group executive, Denis Desautels, former auditor-general of Canada, Gerhard Schulmeyer, former CEO of Siemens Corp., and Milton Wong, chairman of HSBC Asset Management (Canada) Ltd., then make recommendations to the board.

It and the Alcan board and management have already vehemently rejected Alcoa's May 7 bid.

Munroe-Blum, who, along with Garten, was officially inducted at Alcan's annual meeting last month, is one of three members of the Quebec ad hoc committee and one of five members on the Canadian ad hoc committee.

Both groups are to consider whether Alcoa conforms to the requirements of an energy and water-rights deal between Alcan and Quebec, known as the continuity agreement.

Viewed by many as a sort of "poison pill" against a hostile takeover, the deal was signed in December, days after discussions broke down between Alcan and Alcoa about a possible "merger of equals."

It requires that any acquisitor of Alcan maintain the same multi-faceted economic and social footprint in Quebec as Alcan has promised or lose an interest-free $400-million loan along with the far more valuable water and electricity rights.

Two Universite Laval professors recently determined that a conservative estimate of Quebec's commitment was $2.7 billion - a more realistic one, $3.65 billion - compared with Alcan's $2-billion investment.

Alcoa contends it meets the requirements of the continuity agreement for various reasons, including its pledge that the new combined company would have dual headquarters in New York and Montreal, with "strategic management functions" in each city.

Alcoa has formally asked Alcan to begin its consideration of whether the U.S.-based company meets the requirements of the agreement.

Alcan's board can choose not to begin that consideration until the takeover is approved by all relevant regulatory and competition authorities.

Also serving on the Quebec committee are Alcan board chairman Yves Fortier and Tellier. They and Munroe-Blum are on the Canadian committee along with Desautels and Wong.