Takeover talk lifts Alcoa

Article Excerpt

ALCOA INC. $35 (New York symbol AA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 867.7 million; Market cap; $30.4 billion; WSSF Rating: Above average) jumped nearly 10% on media reports that two major mining multinational companies, BHP Billiton and Rio Tinto Plc, may launch separate takeover bids for the company. If a bid goes ahead, the buyer would probably keep Alcoa’s aluminum mining and smelting operations, and sell the less profitable manufacturing businesses. Alcoa has no controlling stockholder, so a takeover is always a possibility. The long-term outlook for aluminum is strong, and Alcoa’s high quality assets would undoubtedly attract several offers. However, a bid from either company would run into anti-trust problems. Even if an offer fails to materialize, it has drawn attention to Alcoa’s improving prospects. Alcoa is a buy. buy…

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