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Alcan-Pechiney merger called ''compelling'': four years ago, a three-way aluminum merger failed. This new proposal may have the right stuff.

Article Excerpt
While some believe that Montreal-based Alcan Inc., has a better chance of acquiring Paris Pechiney Group this time around, as of press time Pechiney was still resisting the hostile takeover, hiring four financial advisers to defend it from Alcan's often Reportedly, Pechiney is even considering renewing its interest in buying the aluminum assets of Corus Group Plc. in a "poison pill" strategy to make the company less attractive to Alcan.

Alcan announced July 7 that it planned to launch an unsolicited 3.4 billion euro ($3.9 billion) tender offer for Pechiney, which it expects to complete by October. The combined company, with total revenues of about $23.9 billion, would remain the No. 2 producer of aluminum, but would be right on Alcoa Inc.'s coattails. It would also be the No. 2 producer of alumina and a world leader in specialty packaging. Further, it would continue to be a large supplier to service centers: Alcan estimates that 19 percent of its pro forma 2002 revenues from rolled and fabricated products were from sales to distribution and industry.

The tender offer is for 41 euros per Pechiney share, which was a 28 percent premium over the July 2 closing price payable in 123 euros cash and three Alcan shares for each five Pechiney shares. Pechiney's board of directors, however, deemed this offer "clearly inadequate when taking into account the company's industrial, technological and intangible assets, and...

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