By Ross Marowits 13 Jun 2007 at 01:20 PM GMT-04:00
http://www.resourceinvestor.com/pebble.asp?relid=32923
MONTREAL (CP) -- American aluminum company Alcoa Inc. [TSX:AL; NYSE:AL] remains in the driver's seat to complete a hostile takeover of Canadian rival Alcan Inc. [NYSE:AA] even though other global mining companies are circling overhead, says an industry analyst.
'I'm just waiting for Alcan to find a white knight and so far I haven't seen it,' Charles Bradford of New-York based Soleil Securities said in an interview.
On Wednesday, Alcan reinforced its intention to find another major manufacturer to either boost the selling price or help it fend off the Alcoa bid.
Christel Bories, Alcan's CEO of engineering products units, said at a news conference in Paris that the company's board is working on options other than Alcoa, noting large mining companies such as Australian mining giant BHP Billiton [NYSE:BHP] are flush with money.
But Bradford said none of the other suitors mentioned to date can produce the synergies offered by Alcoa or would likely have an interest the downstream packaging or aerospace divisions of either North American company.
Alcoa has said it expects to be able to squeeze about US$1-billion in cost savings from the merger.
With no other bid currently on the table, Alcoa is under no pressure to boost its bid, he said. It has an US$8 billion cushion after using just US$22 billion of the US$30 billion it has borrowed for its current offer.
'They have the wherewithal to raise the bid and counter BHP if BHP does make a bid,' Bradford said.
In fact, Alcoa CEO Alain Belda hinted as much when he told reporters in May that he was prepared for any eventuality.
Alcan spokeswoman Anik Michaud downplayed the comments from Bories, describing them as 'old news.'
'It's what we've been saying since day one,' she said from Paris. 'We are considering all of our options.'
Last month, Alcan rejected Alcoa's hostile C$27-billion cash-and-shares offer. Alcan chief executive Dick Evans has said the company is talking with third parties about 'various other transactions.'
Alcan officials were in Paris ahead of the international air show to announce it has won a new long-term agreement to supply European aircraft maker Airbus, a shot across the bow of Airbus supplier Alcoa.
Montreal-based Alcan did not disclose financial terms of the 'multi-year' contract with Airbus, citing competitive factors.
The deal covers a variety of plate, sheet and stringer products, along with small extrusions and tubes for planes including the superjumbo A380 and the new A350 XWB.
The Airbus deal with Alcan comes just over two years after competitor Alcoa, the world's biggest mining company, declared that the first flight of A380 'took with it more new Alcoa products and solutions than any other aircraft in Alcoa's 100-plus years of aviation history.'
At that time, Alcoa said it had signed a long-term supply deal with Airbus worth nearly C$2 billion. At the same time Alcan described itself as a 'major supplier' to the A380 project.
Bradford said he wasn't surprised by Alcan's deal with Airbus given its Issoire facility in France acquired with the purchase of Pechiney.
'I would be shocked if they didn't have a big Airbus deal. They have the facilities in France to do this.'
On Wednesday, Alcan shares closed up 74 cents to C$88.47 on the Toronto Stock Exchange, with a 52-week high and low of C$94.25 and C$41.78.
The company's shares hit the new high on May 28 as speculation mounted about a possible bid by Anglo-Australian mining company Rio Tinto PLC [NYSE:RTP].
Other reports have said Norsk Hydro ASA of Norway [NYSE:NHY] was preparing a US$30-billion-plus proposal.
Bear Stearns analyst Anthony Rizzuto Jr. downgraded Alcan's shares Tuesday, saying the company is unlikely to attract a bidder to rival Alcoa.
Rizzuto said Alcan could make a counteroffer for Alcoa, with a greater mix of stock versus cash. He said Alcan could make a US$50 per share offer for Alcoa and still boost per share earnings next year.
Aluminum aviation products have lost some popularity in recent years as the industry shifts to high-technology plastic-based composite materials that promise to reduce weight.
In the Airbus announcement, Alcan's aerospace and transport operations president Jean-Philippe Cael was positive about aluminum's future in airframes despite a growing focus on the use of lighter composite materials for the manufacture of wings and fuselage.
'We believe that new alloys, combined with innovative design and joining techniques, will ensure that aluminum applications remain competitive for aerospace structures in the foreseeable future,' Cael said.
T
Recent AL News
- Air Lease Corporation Announces Pricing of $300 Million Offering of Preferred Stock • Business Wire • 09/18/2024 12:56:00 AM
- Air Lease Corporation Executive Chairman to Speak at Deutsche Bank Aircraft Finance & Leasing Conference • Business Wire • 08/29/2024 10:31:00 AM
- Air Lease Corporation Announces Delivery of First of Ten New Boeing 787-10 Aircraft to Korean Air • Business Wire • 08/07/2024 10:31:00 AM
- Air Lease Corporation Announces Second Quarter 2024 Results • Business Wire • 08/01/2024 08:05:00 PM
- Air Lease Corporation Announces Delivery of First of Six New Airbus A220 Aircraft to Croatia Airlines • Business Wire • 07/29/2024 10:31:00 AM
- Air Lease Corporation Announces the Delivery of One Airbus A321-200neo Aircraft to Centrum Air (Uzbekistan) • Business Wire • 07/25/2024 08:33:00 PM
- Air Lease Corporation Announces Delivery of First of 19 New Airbus Aircraft to Condor, Germany • Business Wire • 07/18/2024 08:31:00 PM
- Air Lease Corporation Activity Update for the Second Quarter of 2024 • Business Wire • 07/09/2024 10:31:00 AM
- Air Lease Corporation Announces Second Quarter 2024 Earnings Conference Call • Business Wire • 07/01/2024 08:31:00 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 06/18/2024 08:02:02 PM
- Air Lease Corporation Announces Pricing of Public Offering of $1.2 Billion of Senior Unsecured Medium-Term Notes • Business Wire • 06/18/2024 07:40:00 AM
- Form FWP - Filing under Securities Act Rules 163/433 of free writing prospectuses • Edgar (US Regulatory) • 06/17/2024 09:08:55 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/17/2024 08:55:06 PM
- Form EFFECT - Notice of Effectiveness • Edgar (US Regulatory) • 05/17/2024 04:15:36 AM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/15/2024 08:53:53 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/09/2024 08:03:24 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:50:42 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:49:15 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 08:41:22 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/07/2024 08:06:00 PM
- Disney Slashes Streaming Losses, UBS shoots up 9% as profit triples expectations, and More in Earnings • IH Market News • 05/07/2024 11:46:44 AM
- Form 8-K - Current report • Edgar (US Regulatory) • 05/06/2024 09:31:07 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 05/06/2024 09:30:03 PM
- Form S-3 - Registration statement under Securities Act of 1933 • Edgar (US Regulatory) • 05/06/2024 08:59:37 PM
VHAI - Vocodia Partners with Leading Political Super PACs to Revolutionize Fundraising Efforts • VHAI • Sep 19, 2024 11:48 AM
Dear Cashmere Group Holding Co. AKA Swifty Global Signs Binding Letter of Intent to be Acquired by Signing Day Sports • DRCR • Sep 19, 2024 10:26 AM
HealthLynked Launches Virtual Urgent Care Through Partnership with Lyric Health. • HLYK • Sep 19, 2024 8:00 AM
Element79 Gold Corp. Appoints Kevin Arias as Advisor to the Board of Directors, Strengthening Strategic Leadership • ELMGF • Sep 18, 2024 10:29 AM
Mawson Finland Limited Further Expands the Known Mineralized Zones at Rajapalot: Palokas step-out drills 7 metres @ 9.1 g/t gold & 706 ppm cobalt • MFL • Sep 17, 2024 9:02 AM
PickleJar Announces Integration With OptCulture to Deliver Holistic Fan Experiences at Venue Point of Sale • PKLE • Sep 17, 2024 8:00 AM