Canadian aluminum producer Alcan Inc. (NYSE: AL) said late Tuesday that its board has unanimously rejected an advance from rival U.S company Alcoa Inc. (NYSE: AA), calling the $27.6 billion bid inadequate in multiple respects.
In a statement to shareholders, Alcan's board urged shareholders to vote against the hostile bid, saying that after close evaluation, the bid was not in the best interests of the company.
It does not adequately reflect the value of Alcan's extremely attractive assets, strategic capabilities and growth prospects, does not offer an appropriate premium for control of Alcan, Yves Fortier, Chairman of Alcan's Board of Directors stated.
New York-based Alcoa unveiled the $73.25 cash-and-stock bid for its closest rival on May 7, after two years of failed private talks. The combination would have created the world's largest producer of aluminum and alumina.
Despite two years of approaches by Alcoa, at no time was Alcan presented, a compelling proposal - either in terms of economics, structure or conditionality, Alcan's President and CEO, Dick Evans, said in a statement.
Alcan also said both companies have fundamentally different approaches in creating shareholder value, leading the board to conclude that the acquisition was not in its best interests.
Alcoa shares rose $1.06, or $2.72 to $40.01 in after-hours trading. Alcan's U.S.-listed shares rose to $83.30, gaining $2.27, or 2.8 percent after the close of trading Tuesday.