More Competition To Buy Alcan (AL)

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By Douglas A. McIntyre Published

Alcan (AL) has become a hot property. First Alcoa (AA) tried to buy the company and was rejected.

Over the last day, media reports indicated that Australia metals giant Rio Tinto (RTP) might enter the bidding.

Late media reports now say that Norsk Hydro (NHY), the Oslo-based energy and power firm, may make an offer of $30 billion, much higher that the $27 billion that Alcoa bid.

The potential offer is puzzling. While Alcoa and Rio Tinto have metals as their core businesses and would have some real economies of scale in taking over Alcan, the potential saving for Norsk Hydro are much less evident.

An additional problem is that takeover rumors have sent Alcan’s market cap above $31 billion, and shareholder may expect a premium to that, whether that expectation is reasonable or not.

Alcan may just get too expensive to buy.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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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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