Alcoa Inc. (AA-NYSE) recently made an unsolicited offer to acquire Alcan Inc. (AL-NYSE), but after today’s close Alcan formally notified Alcoa that the offer was inadequate and not in the best interests of Alcan holders.
Yves Fortier, Chairman of Alcan’s Board of Directors: "Alcan’s Board of Directors has thoroughly evaluated Alcoa’s offer and concluded that it fails to meet the best interests of Alcan shareholders. It does not adequately reflect the value of Alcan’s extremely attractive assets, strategic capabilities and growth prospects, does not offer an appropriate premium for control of Alcan, and is highly conditional and uncertain. Furthermore, it is clear to us that Alcan and Alcoa have fundamentally different approaches and track records in creating shareholder value. We are convinced that the proposed Alcoa-led acquisition of Alcan is not the right choice for our shareholders. We remain committed, as always, to acting in the best interests of our shareholders. Alcan has a proven record of sustainable value creation and responsible corporate citizenship. It also has a clear strategy and plan for future value creation. Given the rapidly evolving industry environment, we are continuously evaluating all options in the interest of shareholder value."
What is interesting is that Alcan at least has confirmed "despite two years of approaches by Alcoa…..," which does confirm what Alcoa had made public after its formal offer. The odd issue here is that both companies are considered takeover candidates on their own if this did not go through, although at some point anti-trust issues may come into play on major mergers.
Alcan has a $29.8 Billion market cap and Alcoa has a $34 Billion market cap.
Jon C. Ogg
May 22, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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