BHP Billiton may partner buyout firm for Alcoa bid, say reports

Mumbai: BHP Billiton Plc, the world''s biggest miner, is in talks with private equity firms for a possible $40 billion joint bid for US aluminum company Alcoa Inc, newspaper reports said.

Citing unnamed sources close to the company, UK newspaper The Times said BHP''s favored partner was the Blackstone Group.

BHP had appointed investment bank Merrill Lynch to work on a possible bid for Canada''s Alcan Inc, for which Alco has made a $28.7 billion hostile bid.

Alcoa, The Times said, was BHP''s preferred target, but it was unwilling to pay a premium for assets that it does not want to retain and so wanted to team up with a bid partner.

BHP, analysts said, which a record A$13.6 billion after tax profit in fiscal 2007, could probably manage the funding of a takeover of Alcoa Inc. and Alcoa''s 60 per cent-owned Alumina Ltd. of Australia.

With strong revenues from its oil and gas assets in Europe, Australia and the Gulf of Mexico, analysts expect BHP to have enough cash to pay for its share of a joint bid with Blackstone.