Chris Rankin, an analyst at Canaccord Adams, has some advice for investors trying to make money off previously announced takeovers. He looked at a pair of deals: The private equity purchase of Bell Canada Inc. (BCE), and Rio Tinto Plc’s (RTP) bid for Alcan Inc. (AL).

Teachers’ and its partners are offering Bell shareholders C$42.75 per share, and Rio plans on handing over US$101 for every Alcan share. Shares of both of those stocks are trading below these offer prices, with Bell around C$40.90 on the Toronto Stock Exchange, and Alcan near US$98.70 on the New York Stock Exchange at midday Monday.

New Positions:

Alcan Inc., which is being acquired by Rio Tinto plc for $38.1 billion, reported 2Q net income fell 3.7% to $438m, or $1.17/share. Forex losses due to a strong Canadian dollar nearly doubled to $193m. Adjusted EPS of $1.62 (+9.5% y/y) missed analysts' average estimate of $1.71. Revenues rose 8.2% to $6.61b, topping analyst expectations of $6.46b. Alcan benefited from higher aluminum realizations, better pricing and mix in the Engineered Products and Bauxite & Alumina businesses and increased volumes across most businesses. Aluminum prices gained 5.8% on the quarter, but profit at its metals unit fell 3.9% due to higher materials and energy costs. In a press release, CEO Dick Evans commented, "At the aluminum industry level, extremely strong Chinese demand growth should underpin ongoing favourable conditions. We continue to expect our financial results to reflect not only these favourable industry conditions, but also Alcan's very strong competitive position." NYSE-listed shares of Alcan gained 0.3% to $96.80 on Monday.

The two analysts took several financial valuation metrics from Rio Tinto's bid including price earnings ratio, cash flow per share and book value and applied them to other producing mining companies that they currently cover in order to come up with a price tag should a takeout arise.

Back in May, UBS analyst Brian MacArthur wrote that Alcoa has a "sum of the parts" valuation of up to US$56 a share. "However, we note that multiple transactions, among other hurdles, may have to be overcome before such value could be realized," he wrote in a note to clients Tuesday. "Furthermore, by the time any such break-up may be ultimately achieved, actual values per business may change."

However, he is still raising his price target on Alcoa from US$46 a share to US$55 a share. He is applying a price-earnings multiple of 14 times to Alcoa shares, up from 12 times. He wrote that 14 times is still below historical averages, and below the implied multiple in Rio Tinto PLC's bid for Alcan.

A good amount of credit for easing private equity collapse fears was due to the huge Alcan (AL) buyout offer from Rio Tinto plc (RTP). It was the 'art of the deal' on mega steriods. Options players in AL did amazingly well today as I noted in my options report on Thursday: http://www.cnbc.com/id/19726900

Alcoa Inc. announced Thursday it has withdrawn its $27 billion hostile bid for Alcan Inc. following Rio Tinto's higher offer, bringing to a close its two-year attempt to acquire the company. Rio's bid, worth $38.1 billion ($101/share), was a third higher than Alcoa's $28.8 billion ($76.03/share). "[A]t this price level," said Alcoa CEO Alain Belda, "we have more attractive options for delivering additional value to shareholders." Alcoa will now restart its share buyback program, which it suspended May 7 when it submitted its bid. Alcan finished Thursday's session up almost 9% at $98.45 following news of Rio's bid. Shares of Alcoa also closed up 6.7% and tacked on another 1.6% in AH trading on speculation that it will now be taken over. "The deal rips Alcan from the jaws of Alcoa in what had become a nasty spat," said Interactive Brokers Group market analyst Andrew Wilkinson. "Traders are now focused on the likelihood of a bid from Australian mineral producer, BHP Billiton." Other possible suitors include CVRD or Xstrata plc. A total of 259,552 Alcoa calls and 55,738 Alcoa puts were traded Thursday, well beyond Alcoa's normal options volume of 64,948 contracts all together.

The price tag 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.

Mining giant Rio Tinto announced Thursday it is offering $38.1 billion in cash, or $101 per share, for Canada's Alcan Inc. That bid is 32.8% higher than a hostile offer from Alcoa of $28.8 billion, or $76.03 per share. Alcan's board of directors is unanimously recommending that shareholders accept the Rio offer. The new bid represents a 65.5% premium to Alcan's all-time high prior to Alcoa's hostile offer and a 13% premium to Wednesday's close. The combined company will be called Rio Tinto Alcan. The deal is expected to result in after-tax synergies of about $600 million. Should Alcan elect not to complete the transaction, it will owe Rio a $1.05 billion breakup fee. According to Bloomberg, the acquisition will increase Rio's annual aluminum output by a factor of four, to 4.3 million tons -- enough to make 195,454 Boeing 787s. "Rio recognizes that it needs to increase its size, as it has been slipping in terms of market cap relative to others," said commodity strategist Peter Richardson. Aluminum will amount to 32% of Rio's 2008 earnings after the acquisition, up from 9% in 2006, according to Credit Suisse analysts.

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.