Alcan rejected on Tuesday an unsolicited $27.6 billion takeover offer from rival aluminum producer Alcoa, but the Canadian company said it was in talks with third parties.
Alcan said shareholders should not tender shares to the Alcoa offer, which it said does not adequately reflect the value of Alcan's assets, strategic capabilities and growth prospects.
"Furthermore, it is clear to us that Alcan and Alcoa have fundamentally different approaches and track records in creating shareholder value. We are convinced that the proposed Alcoa-led acquisition of Alcan is not the right choice for our shareholders," Alcan's chairman, Yves Fortier, said in a release.
Alcan's shares closed at $81.03 on the New York Stock Exchange on Tuesday, well above Alcoa's offer of $58.60 a share plus 0.4108 of its shares, which values Alcan at $75 a share.
Both Alcan and Alcoa's shares rose in after-hours New York trading. Alcan was up about 3% at at $83.40, while Alcoa was up 2.7% at $40.
Speaking to Reuters shortly after the announcement, Alcan chief executive Dick Evans said his company was in discussions with other parties, but would not say which ones. "Our board has asked us to evaluate all alternatives, both internal and external," he said.
Evans would not say whether Alcan would consider trying to take over Alcoa. Alcoa responded on Tuesday that it had offered a good price for Alcan, but would not comment on its next step.
"Our offer is full, fair and balanced," Alcoa chief financial officer Charles McLane told the Reuters Global Mining and Steel Summit in New York shortly after Alcan said it had rejected the bid.
McLane declined to comment on specifics of the rejection until he could review it with fellow Alcoa executives.
Alcoa spokesman Kevin Lowery said later: "We are currently reviewing Alcan's response and will provide a more in-depth response after we have time to examine it further.
Alcan's shares are up about 30% since Alcoa's takeover bid was announced earlier this month as shareholders have anticipated other large players may step in with rival offers.
One analyst said he expected other offers, noting the share price was still well above the Alcoa offer. "I expect other players to come in. It's not a question of if, now it's a question of when," said John Ing, analyst and president of Maison Placements Canada. "This is going to play out for a very long time."
Another analyst said he didn't expect anything immediately, as Alcoa would likely wait to see how many shares are tendered before Alcoa's initial offer expires on July 10.
Alcan and Alcoa had been in merger discussions for two years, but were unable to come to an agreement, Alcan said.
Industry sources have estimated that, combined, Alcoa and Alcan control about 70% of the aerospace aluminum market, meaning a hookup between the two would face scrutiny from competition regulators.
Asked about businesses that might overlap after a merger and pose antitrust hurdles, Alcoa's McLane said: "Expressions of interest have been made."