Alcan rejects Alcoa''s $27 billion bid, opens talks with rival bidders

Alcan Inc.''s board of directors unanimously rejected a $27.5- billion hostile bid from Alcoa Inc dismissing the offer as inadequate, and said it is currently engaged in talks with other potential suitors.

Dick Evans, chief executive said the Montreal-based aluminum giant Alcan, is involved in "on-going discussions with other third-parties" but declined to comment further.

Reports quoting sources said Alcan has signed confidentiality agreements with at least two potential suitors who "are actively looking" at the company. The rumoured bidders for Alcan include BHP Billiton PLC, Rio Tinto PLC, and Companhia Vale do Rio Doce of Brazil.

Alcan''s board asked shareholders to reject Alcoa''s May 7 bid as it fell short of the company''s value and was not in the best interests of investors, chairman Yves Fortier said in a statement.

"It does not adequately reflect the value of Alcan''s extremely attractive assets, strategic capabilities and growth prospects, does not offer an appropriate premium for control of Alcan, and is highly conditional and uncertain," he said.

The companies, Fortier said, have "fundamentally different approaches and track records in creating shareholder value."