Rumors swirling since Alcoa Inc. (NYSE:AA) launched its US$28-billion hostile takeover for rival Alcan Inc. (AL (defunct)) on May 7 have often included the world's mining giants. So with BHP Billiton (NYSE:BHP) reportedly targeting Alcoa, its seems only logical that its Anglo-Australian rival, Rio Tinto (RTP), should be pursuing Alcan as the miners prepare to bulk up. Alcan is also said to be searching for a white knight bidder to fend off the hostile offer from Alcoa.
The latest in a seemingly endless flow of speculation and unnamed sources comes from the Times Online. The report says Rio Tinto is preparing a US$34-billion bid for Alcan. It also comes on the heels of Alcan telling the U.S. Securities and Exchange Commission on Tuesday that it is “undertaking negotiations” with interested parties and for the first time is actively pursuing alternative bids.
"Wall Street bankers believe that the Rio offer is 'ready to go hot' and predict a formal approach within two weeks," the Times report said.
Alcoa's offer for Alcan was due to expire on Tuesday, but was extended to Aug.10 and could be again. Alcoa also recently secured a US$30-billion credit facility from lenders such as Citigroup and Goldman Sachs.