Alcan (B): Reacting to the Alcoa Offer
(4 pages of text)
In May 2007, aluminum giant Alcoa announced its intentions to perform a hostile takeover of Alcan. Case B is set at this point and before Rio Tinto was in a position to announce its own offer. Students are asked to perform valuations of Alcan to determine the premium offered by Alcoa, consider the strategies Alcan can employ, and supply the suggestions Alcan managers should provide shareholders.
The teaching objectives are: 1) To explore the options open to the management of a takeover target 2) To estimate the value of a takeover target (including synergies) and determine whether to accept the offer on the table 3) To explore the qualitative and quantitative issues surrounding bidding competition.
Mining, Quarrying, and Oil and Gas Extraction
Canada;Global, Large, 2007
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