Alcoa headquartersJeff Swensen
Commodity producers were down on their luck on Tuesday afternoon, but one stood out for its modest gain: Alcoa Inc. was up 2.3 per cent in late afternoon trading, striking quite a contrast to the 1.4 per cent downturn among materials stocks within the S&P 500.
The reason? Bloomberg News reports that some investors are buying into rumours that the U.S.-based aluminum producer has caught the attention of Rio Tinto PLC, which gobbled up Canada's Alcan Inc. in 2007 for $38-billion (U.S.), and marked the top of the commodities cycle before the onslaught on the credit crisis and global recession.
According to Bloomberg, which relied upon a note from an equity-options analyst at Interactive Brokers Group, the rumours even come with a prospective takeout price: $25.50 a share. Alcoa shares recently traded hands at $17.74, up 42 cents, giving it a market capitalization of less than $20-billion.