 |
 |
||||||
[July 2007]
Rio Tinto Makes Recommended All Cash Offer for Alcan – Alcoa Withdraws
On 12 July 2007, Rio Tinto and Alcan announced they had reached an agreement for Rio Tinto to make an offer to acquire all of Alcan's outstanding common shares for US$101 per common share in a recommended, all cash transaction. The offer represents a total equity consideration for Alcan of approximately US$38.1 billion.
The offer represents a premium of 65.5% to Alcan's all time high closing share price of US$61.03 on 4 May 2007 prior to the Alcoa offer. It also represents a premium of 32.8% to the value of Alcoa's current offer of US$76.03, based on Alcoa's closing share price on 11 July 2007.
The combined aluminium product group, to be named Rio Tinto Alcan, will be a new global leader in the aluminium industry with large, long life, low cost assets world-wide. The companies said that the combined Group's access to significant bauxite reserves, competitive alumina refining, low cost hydro power, leading smelter technology and a deep and diverse talent pool provides an excellent position to capitalise on the favourable demand fundamentals of the aluminium industry. Rio Tinto Alcan will also have a strong portfolio of growth projects.
In light of Rio Tinto's announced agreement to purchase Alcan, Alcoa Inc (New York, USA) announced that it had withdrawn its own offer. “Rio's offer for Alcan strongly reinforces our view of the underlying value in the aluminum industry and its bright prospects for the future,” said Alcoa Chairman and CEO Alain Belda. “However, at this price level, we have more attractive options for delivering additional value to shareholders. We will continue to deliver strong results, make targeted growth investments, trim under-performing businesses, and further enhance returns to shareholders by resuming our share repurchase program. That is a better path forward for our shareholders, our employees, and our communities.”
www.riotinto.com
www.alcoa.com
ENDS