Shares of Alcan Inc rose on Monday after reports of possible takeover offers from Norsk Hydro ASA and Rio Tinto raised expectations of a bidding war with Alcoa Inc for Canadian aluminum producer Alcan Inc.
Norsk Hydro, an Oslo-based energy and metals producer, is preparing a bid valued at more than US$30 billion for Alcan, the Globe and Mail reported, citing unnamed bankers close to both companies.
Rio Tinto, the world`s third-largest miner, hired Deutsche Bank AG to advise it on a possible Alcan bid, the Age newspaper reported, without citing anyone.
Interest in acquiring Alcan follows a rise in the price of aluminum, which has gained 54% in London in the past two years. The Montreal-based company is attractive partly because it gets much of its power from hydroelectricity, keeping costs low compared with most other aluminum producers, analysts said.
Alcoa made an unsolicited US$27.7 billion takeover offer for Alcan on May 7 after two years of talks between the two companies broke off in December.
BHP Billiton may make its own offer for Alcan, the Globe and Mail newspaper reported last week.
"Anybody that comes up with a bid will be outbid by Alcoa," Charles Bradford, an analyst at Soleil Securities in New York, said in a telephone interview.
Alcoa, based in New York, has received financing commitments for US$30 billion of loans from Citigroup Inc and Goldman Sachs Group Inc, which gives the U.S. company the upper hand, Bradford said.
Alcan`s shares have risen 66% this year.
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