UBS: Alcan Worth More Than Alcoa Offering

Investors are assessing numerous potential transactions that could include Alcan as a target or break-up candidate,¡± UBS analyst Brian MacArthur said in a note to clients. As such, he evaluated Alcan's business using a sum of the parts analysis and concluded the company could be worth between US$79 and US$97 a share, adding multiple transactions may have to be overcome before such value is realized.

He raised his target price on Alcan from US$80 to US$87, but given the shares are up nearly 80% in 2007, trading above the Alcoa bid at around US$78.20, he downgraded his rating from ¡°buy¡± to ¡°neutral.¡± Meanwhile, Mr. MacArthur said investors who question the Alcan bid, are suggesting Alcoa should be broken up as well.

Based on a similar sum of the parts analysis, he said Alcoa could be worth between US$44 and US$56 a share. He maintained his ¡°buy¡± rating and $US46 price target for the stock.

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