Alcoa Shares Rise on Report BHP Billiton May Make Bid

June 18 -- Shares of Alcoa Inc. rose to a six- year high after the Times of London reported that BHP Billiton Ltd., the world's largest mining company, has revived plans for a $40 billion takeover of the U.S.-based aluminum producer.

Alcoa rose 28 cents, or 0.7 percent, to $41.88 at 4:15 p.m. in New York Stock Exchange composite trading, after earlier reaching $42.90, the highest since June 11, 2001. Melbourne-based BHP rose 68 cents, or 2 percent, to A$34.68 in Sydney.

Marius Kloppers, who will succeed BHP Chief Executive Officer Charles ``Chip'' Goodyear on Oct. 1, may revive plans shelved by Goodyear in February to make a bid for Alcoa, the newspaper reported, without saying where it got the information. BHP hasn't made an approach to Alcoa, the newspaper said. Alcoa made a hostile $27.7 billion bid for rival Alcan Inc. on May 7 after their two years of merger talks broke off in December.

``BHP could do this if they wanted to, but the most economic way to do this would be to let the two aluminum producers merge and then for a mining conglomerate to take them out,'' said Scott Burns, a metals and mining analyst at Morningstar Inc. in Chicago. ``Consolidation definitely makes sense in this industry.''

Alcoa wants to acquire Alcan to regain its position as the world's largest aluminum company and fend off growing competition from emerging market producers, including China.

BHP doesn't comment on rumor or speculation, Melbourne-based company spokeswoman Samantha Evans said. Alcoa spokesman Kevin Lowery declined to comment.

Takeover Speculation

Alcoa and Alcan have been the repeated subjects of takeover speculation, with analysts citing Rio Tinto Plc and Brazil's Companhia Vale do Rio Doce as potential suitors. Canada's Globe and Mail newspaper reported May 23 that Montreal-based Alcan was in talks with BHP to fend off Alcoa's hostile bid.

A five-year rally in metal prices has fueled $98 billion of announced takeover bids in the industry this year. Speculation of aluminum-industry consolidation has helped boost shares of Alcoa 39 percent in the past year and Alcan by 80 percent.

Alcoa's shares rose 6.4 percent on Feb. 13 after the Times said BHP and Rio Tinto were independently planning $40 billion takeover bids for Alcoa. Aluminum prices have almost doubled in the past four years, partly because of burgeoning demand in China.