Alcoa shares jump on takeover report

Two Australian mining companies are independently considering making bids of about $40 billion US for the U.S. aluminum producer Alcoa Inc., a British newspaper reported Tuesday.

Alcoa shares rose six per cent on the report.

BHP Billiton Ltd. and Rio Tinto PLC, both based in Melbourne, Australia, have drawn up feasibility studies for a bid but neither has yet approached Alcoa, the Times of London reported, citing unnamed sources.

The Times report said BHP Billiton has already done the groundwork for a bid while Rio Tinto had not progressed as far.

Alcoa officials on Tuesday did not immediately return a call for comment on the report. Alcoa has struggled to expand its business and is now second in the industry to Russia's Rusal, the world's largest aluminum producer.

Alcoa stock rose $2.10 to $35.00 USon the New York Stock Exchange. Its market capitalization as of Monday's closing price was about $28.5 billion US.

On the Toronto Stock Exchange, shares of Canada's Alcan Inc. jumped $2.65to $63.90— a jump of four per cent.