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Last Updated: Tuesday, 22 May 2007, 23:43 GMT 00:43 UK
Alcan rejects hostile Alcoa offer
Aluminium ingots moved by crane
A tie-up between the two would create a market leader
Canadian aluminium producer Alcan has rejected a $27bn hostile takeover from US rival Alcoa.

Alcan urged shareholders to turn down the offer on the grounds that it undervalued the firm, its assets and its growth prospects.

Chairman Yves Fortier said the company was convinced that the proposed acquisition was "not the right choice".

Alcoa tabled the hostile offer of $75 a share early in May, abruptly ending two years of merger talks between the two.

According to the US firm, a tie-up between the firms would create the world's largest aluminium producer. Alcan currently operates in 61 countries and Alcoa in 44.

Shares in Alcan closed at $81.03 on the New York market on Tuesday - significantly higher than Alcoa's offer price.

Under the Alcoa proposal, Alcan investors would get $58.60 a share plus 0.4108 of its shares.

Earlier this year, speculation had suggested that Alcoa itself could be targeted by bids from mining giants BHP Billiton and Rio Tinto.

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