Resist the Temptation

Article Excerpt

ALCAN INC. $102 (Toronto symbol AL;Conservative Growth Portfolio,Resources sector; Shares outstanding: 369.7 million; Market cap: $37.7 billion; SI Rating: Average) is trading below Rio Tinto Ltd.’s takeover offer of $101 U.S. a share (about $105 Cdn.) That’s because of investor worries that Rio Tinto may have trouble completing the takeover, given recent turmoil in credit markets and falling aluminum prices. The difference between the current price and the offer may entice some investors to buy Alcan, hoping to lock in a quick profit before Rio Tinto’s offer expires on September 24. However, we don’t recommend buying Alcan now. The stock could drop 30% or more in the unlikely event that Rio Tinto pulls out, while the most it can gain is just 3%. Current Alcan holders should tender their shares. BCE INC. $41 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 804.7 million; Market cap: $33.0 billion; SI Rating: Above average) has accepted a $42.75-a-share all-cash takeover offer from a group…