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Commodities & Metals

Alcoa Remains Higher on Bid Hopes

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By Douglas A. McIntyre Updated Published
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Last night we ran a piece on Alcoa as potentially being acquired, although the speculation has been out there and we have covered this several times.  BHP Billiton(BHP-NYSE/ADR) and Rio Tinto (RTP-NYSE/ADR) are each preparing theirown $40 Billion bids according to the Tuesday edition of the Timesnewspaper (link here).Be aware that the article says that the two are independent and neitherhas approached the board of directors yet.  The stock is still up 8% around $35.60 in early trading, even though Reuters said that at least BHP Billiton is not currently eyeing the company.

This is one that we have listed as one of the "10 Most Undervalued"stocks back in mid-December when shares were closer to $30.00 and wealso noted that things were improving and the company was takingefforts to leverage up its balance sheet on January 19 in what seemedlike classic anti-takeover leveraging.If a buyer wants in they better strike before the company initiates theplan fully, otherwise they will be buying a more leveraged asset.Shares were $31.25 at the time.

Lastly, we ran a break-up value on it just last Thursday showing how its peers could signal up to $46.00 as a break-up value to the stock. It is hard to know with debt structures and other termsexactly what this would mean for common holders, so keep your eyes andears open on this one.

Jon C. Ogg
February 12, 2007

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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