Alcan makes an unsolicited offer

Global aluminium giant Alcan has made a tender offer for the French Pechiney Group to solidify its position as one of the world’s largest aluminium and packaging companies.

If the deal were to go through, Pechiney’s business units, which achieved sales of 11.9 billion Euros in 2002, would be combined with Alcan’s $12.5 billion operations, creating a global leader in the aluminium, aluminium conversion and packaging industry.

The offer itself, which consists of 60% in cash and 40% in new Alcan common shares, values each Pechiney share at 41 Euros each, a premium of 28% over the closing price as of July 2, 2003 and 39% over the one-month average.

‘I am convinced that Alcan’s offer represents an exceptional opportunity for both Pechiney and Alcan and that now is the right time to seize it,’ said Travis Engen, Alcan’s President and CEO.

However, in a brief reply, Pechiney executives expressed their surprise at the ‘unfriendly approach’ that Alcan had taken. They said that the proposed offer ‘seriously undervalued’ the strategic potential of the company.

News of the potential deal did not hurt the performance of Pechiney shares, however. Today, they are currently trading at close to 44 Euros.

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