Alcoa bids for Elkem (October 07, 2002)

U.S. aluminum giant Alcoa (AA-N) has initiated a cash tender offer for 3.5 million shares in Norway’s Elkem at 175 Norwegian kroner per share, or about US$26.31 apiece.

Alcoa, which currently owns 46.3% of Elkem’s outstanding shares, says it will will buy the shares on a first-come/first-served basis, including tenders from holders of 1000 shares or less.

The tender offer will close Oct. 15 at 4 p.m. (Oslo time.)

Elkem, through its 50-50 partnership with Alcoa, is the second-largest aluminum producer in Norway. Elkem Aluminium has a primary production capacity of 200,000 tonnes per year.

Alcoa has held shares in Elkem since 1998, but under quirky Norwegian securities-trading law, any company with more than 40% ownership has to make an unconditional cash offer for all the outstanding shares at a price equal to the highest price paid by the acquisitor during the last six months.

In January 2002, Alcoa surpassed that 40% barrier and launched a bid for Elkem shares at 155 crowns per share (or US$17.38, at the time).