Canadian giant Alcan Inc on Tuesday snubbed US rival Alcoa Inc's bid to create the world's biggest aluminum company by refusing the former parent company's hostile US$33 billion bid.
Alcan's board "unanimously recommends shareholders reject Alcoa Inc's unsolicited offer to acquire Alcan," a company statement said.
"It doesn't 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," Alcan chairman Yves Fortier said.
The firms "have fundamentally different approaches and track records in creating shareholder value," he said.
Alcoa, the world's second-largest aluminum company, had offered US$73.25 per share for Alcan on May 7. The offer comprised 80 percent cash and 20 percent stock.
Alcoa said a tie-up would forge a "top five" global metals firm with US$54 billion in revenues, 190,000 employees and a big global footprint with operations in Europe, North America, Asia and Australia.
In a conference call after unveiling the bid, Alain Belda, chairman and chief executive of Alcoa, said Alcoa and Alcan were "two companies that belong together" for "a stronger future for both."
He said in a letter to Alcan president Dick Evans that the merger could generate US$1 billion in cost savings while providing more cash for research and development.
On Tuesday, Evans said: "We do not feel the need to merge with anyone."
In an interview with AFP, Evans said Alcan already has the "scale, leading technology, well demonstrated track record and execution" to be a global leader.
Alcan has "strong projected cash flow" and "a very attractive pipeline of growth opportunities," he said.
"So we do not feel an urgent need [to be assimilated to grow]," he said.
Founded in 1902 as the Canadian unit of Alcoa, Alcan was spun off in 1928 amid US anti-trust concerns.
Alcoa, which operates in 44 countries, said its offer for Alcan was made after nearly two years of private talks on reuniting.
Evans said Alcan is involved in "ongoing discussions with other third parties" and might consider a combination, if it created "value for shareholders and went beyond what we felt was available for an internal strategy."
But not at the price offered by Alcoa, he said.
Asked if Alcan might bid on Alcoa, he said: "Our board has asked us to consider all alternatives."
Following Alcoa's May 7 bid, Alcan shares surged 35 percent to close at US$82.11, suggesting a possible bidding war amid a global boom in commodities and surging demand for aluminum and related products, particularly in Asia.
On Tuesday, Alcan stock closed at US$81.03 in New York, down 0.07 percent, but still near its 52-week high of US$82.60 and double its low in September last year.
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