Alcan rejects buyout bid from Alcoa

Alcan Inc. rejected a $27.4-billion bid from Alcoa Inc. as inadequate, signaling that a higher price might be needed to win acceptance for a takeover that would create the world's largest aluminum company.

The offer "does not adequately reflect the value" for Montreal-based Alcan and "does not offer an appropriate premium for control," Chairman Yves Fortier said in a filing. "Alcan and Alcoa have fundamentally different approaches and track records in creating shareholder value."

Alcoa wants to head off competition, gain access to cheap supplies of electricity and avoid becoming a takeover target.

Shares of Alcan have jumped 33% since the May 7 bid, topping the offer from New York-based Alcoa. The shares fell 7 cents Tuesday to $81.03. Alcoa shares fell 4 cents to $38.95.