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Alcan has long been pursued not only by Alcoa but also by BHP Billiton, according to an Alcan shareholder and industry sources.

So much so, that it is understood Alcoa would not be surprised to encounter a competitor in its hostile run-up for Alcan, if it does not become a target itself. An industry source said Alcoa could, in fact, have made the hostile move to preempt becoming the target of consolidation.

BHP has been rumored to be scouting both of the aforementioned aluminum companies, but it is thought unlikely it could swallow the two at the same time due to the amount of cash needed and antitrust considerations, according to the shareholder and industry sources. It has for some time been speculated that Alcoa and BHP were talking to Alcan, the shareholder elaborated, adding that the target’s investors are anticipating a rival bidder to surface even though yesterday’s offer had a 20% premium over Alcan’s already high share price at USD 61.00 on Friday’s close.

“The rumor mill is that [Alcan has] been talking to Alcoa, BHP Billiton and possibly others. We will see if somebody else will come out of the woodwork and top that price,” the shareholder commented.

In addition to AngloAmerican being mentioned as a potential rival suitor for Alcan or Alcoa over the past year, Xstrata was tagged as another likely buyer by the industry source. Due to the cyclical nature of the industry and long lead times for projects to come to fruition, however, private equity firms are less likely to pursue either Alcoa or Alcan, despite a possibility that some may have already run numbers on the companies, according to a previous adviser to Alcan.

One industry banker explained the expected rivalry for Alcan from a strategic as a sign of the times for low-growth basic industries, such as steel or mining. Players look for growth by merging to rationalize capacity and raise prices, he said.

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