Friday, May 25, 2007

The hunted becomes the hunter?


A few short days after rejecting a hostile takeover bid by American based Alcoa, and apparently soliciting offers from an Australian aluminum producer, Alcan the Montreal based aluminum corporation is sending cryptic messages that it may just turn around and try and gobble up Alcoa.

Alcan officials put together a blue print for the Securities and Exchange Commission this week that asks and answers a number of potential questions, including one that asked if Alcan was prepared to utilize the Pacman strategy, which would see Alcan attempt to gobble up shares of Alcoa in a bid to stop any further attempts at a hostile takeover.

To cloud the issue even further, Alcan said that they might still be willing to entertain an offer to buy from Alcoa, but only; “If Alcoa brought forward a new proposal that made sense for our shareholders; we would consider it, but certainly not under the currently proposed terms and price,"

In other words, they want more money! At the close of business on Friday Alcan’s shares were worth $91.65 on the TSE, Alcoa’s offer earlier this week was $81.20 a share.

The fate of Canada’s largest aluminum producer and a giant economic force in the northwest rests on a gap of little over 10 dollars a share. It’s a fascinating lesson in how the global economy can change from day to day, but for the residents of Kitimat and the Northwest who have their lives invested in the place, the various twists and turns of international marketplace must be making for some nervous moments.

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