Rio Tinto to extend deadline for US$38.1B takeover bid for Alcan

Rio Tinto says its US$38.1-billion takeover of Canadian aluminum giant Alcan Inc. (TSX:AL) is on track even though it plans to extend the offer deadline to give it more time to obtain regulatory approvals. The offer of US$101 a common share for Montreal-based Alcan is open for acceptance until Sept. 24, but London-based Rio Tinto said Friday it "currently intends to extend the offer" because necessary approvals will take longer to obtain. "Obviously there are a number of jurisdictions where we need to get the regulatory approval and they take different lengths of time, but there's nothing in any way unusual about it," company spokesman Nick Cobban said in an interview from London. Approvals are required from government officials in the European Union, the United States, Canada, Australia and France. Some have already been obtained. Cobban could point to no specific approvals problems and added financing for the purchase has been completed. "The syndication is complete, oversubscribed in fact," he said. The offer is still expected to close in the fourth quarter, which begins Oct. 1. "There's nothing really untoward about the time scale. It's very much in line with what we've always envisaged." Alcan spokesman Michael Kuhn said the Montreal-based company is not concerned by a delay. Earlier this month, the Quebec government said it agreed with Alcan's board that Rio Tinto's offer respected a continuity agreement signed by Alcan and the Quebec government last December. In exchange for Alcan's investment in a prototype smelter at Saguenay, Que., it provided a $400-million interest-free loan along with water and energy rights. Economic Development Minister Raymond Bachand said the takeover would spell good news for Quebec's Saguenay region, where the aluminum industry plays a key role in the economy. Alcan will not hold a formal shareholders meeting to approve the sale. However, two-thirds of Alcan's 372.4 million shares must be tendered, he said. Meanwhile, Rio Tinto announced Friday it has scheduled special meetings of its shareholders to vote on the takeover and increasing the company's borrowing limit to US$60 billion. A meeting of Rio Tinto PLC will be held on Sept. 14 in London, while a meeting of Rio Tinto Ltd. will be held Sept. 28 in Melbourne, Australia. Rio Tinto is headquartered in Britain, combining Rio Tinto PL, a London-listed company, and Rio Tinto Ltd., which is listed on the Australian Securities Exchange. With 71,000 employees worldwide and sales of US$27.1 billion, Rio Tinto Alcan will be one of Canada's biggest companies with 11,000 employees in Canada, including nearly 8,000 in Quebec. Also, Montreal will be the headquarters for the aluminum division and R&D will be centred in Quebec. Alcan had been fending off a hostile $28-billion takeover bid from U.S. rival Alcoa Inc when Rio Tinto offered US$101 per share. Alcan shares gained 40 cents to C$102.60 in trading Friday afternoon on the Toronto Stock Exchange.