Alcoa Inc.'s bid for Montreal-based Alcan Inc. - a deal heavy on the aluminum side, but with a significant plastics packaging angle - got the thumbs down from Alcan.
Alcan announced May 22 its board of directors is recommending shareholders reject the unsolicited bid by Pittsburgh-based Alcoa. Alcan called the $27.4 billion takeover offer ``inadequate in multiple respects.''
Both aluminum makers have built up positions in plastics. Alcoa's plastics packaging operations include Closure Systems International and Reynolds Food Packaging. Alcan Packaging, based in Chicago, includes flexible and barrier packaging, caps and closures, and other types of plastics packaging.
Alcan's plastics operations include factories it picked up in the 2003 acquisition of Paris-based Pechiney SA.
Packaging analyst Ghansham Panjabi of Wachovia Capital Markets LLC in New York, in a report after the May 7 takeover bid, said Alcoa could speed up its strategic review of its packaging businesses to raise money to help support the purchase.
Alcoa made its offer after what its chairman and chief executive officer, Alain Belda, said was nearly two years of discussions on combining the two companies. Together, Alcoa and Alcan would generate sales of $54 billion.
But Alcan said the offer was too low.
``Despite two years of approaches by Alcoa, at no time was Alcan presented a compelling proposal - either in terms of economics, structure or conditionality - that was in the best interests of our shareholders,'' said Dick Evans, Alcan's president and chief executive officer.
Alcoa spokesman Kevin Lowery said May 23 that Alcoa ``is reviewing Alcan's response and will provide a more in-depth response after we have had time to examine it further.'' He said Alcoa believes it made a fair offer.