Alcan takeover talk heats up

Speculation over more offers for Alcan ramped up Monday amid a flurry of reports on possible bidders for the Canadian aluminum producer.

Rio Tinto PLC was reported to have hired Deutsche Bank to act as advisers on a possible bid, the Sydney Morning Herald said, citing anonymous sources.

Meanwhile, other published reports had Norsk Hydro ASA, which is 43 per cent owned by the Norwegian government, possibly gearing up for a run at Alcan.

The Globe and Mail reported that Norsk Hydro is preparing a $30-billion US bid, citing investment bankers working with the companies.

Alcan shares gained $2.60, or almost three per cent, to close at $94.25 on the TSX.

Last week, Alcan rejected a $27-billion US takeover bid — or $33 billion US when acquired debt is included — from Alcoa, calling it inadequate.

In a filing with the U.S. Securities and Exchange Commission last week, however, Alcan said it might be open to a sweetened bid from its American counterpart.

In the filing, Alcan also said it is "continuously evaluating" all options regarding a possible "Pac-Man strategy" in which it would attempt to acquire Alcoa.

A "Pac-Man strategy" is named after the 1980s video game, in which the characters try to swallow their opponents or risk being eaten themselves. In the world of takeovers, the strategy could see Alcan buying shares in Alcoa to try to thwart a hostile takeover.

Alcan said Friday it was in talks with unidentified third parties. The Globe said last week that Alcan had been in talks with Australia's BHP Billiton.