Amcor Ltd. has confirmed it is in talks to buy part of the Alcan Packaging business acquired by Rio Tinto plc in late 2007.
Amcor said discussions are under way but ``there can be no assurance that any binding proposal or transaction will result from those discussions.''
Amcor revealed the discussions in a response to a letter from the Australian Securities Exchange. The letter questioned if Amcor had any knowledge of why its stock price fell about 15 percent from Feb. 2 to Feb. 6.
Julie McPherson, Amcor company secretary and group general counsel, said in the response that speculation about an equity issue could be behind the stock movement. Amcor admitted that if the talks are successful, the Melbourne-based company would consider an equity issue to finance a transaction. It has no other reason for an equity issue at this time.
Amcor did not elaborate on its talks with Rio Tinto.
``Those discussions are confidential and incomplete in nature,'' McPherson stated in the response.
Amcor said last year that it plans to grow organically and through acquisition. Last summer, Amcor Chief Executive Officer Ken MacKenzie said growth will focus on flexible packaging and PET containers, areas in which the firm already is strong.
Rio Tinto said it was interested in divesting the packaging business when it acquired Alcan Inc. in late 2007. Rumors that Amcor was interested in buying the business gained strength in September.
Alcan Packaging makes flexible packaging, including plastics types, for food and beverage, medical and pharmaceutical, cosmetics and tobacco markets. It had sales of US$6.2 billion in 2007 when it ran 129 facilities employing 30,000 in 31 countries.