WMC shares soar on Alcoa takeover talk


WMC's Hugh Morgan said lower commodity prices were responsible for a first-half profit fall

SYDNEY, Australia (CNN) -- Shares in Australia's third-largest miner WMC Ltd continued to climb Wednesday after the company confirmed it is talking to U.S. resources giant Alcoa and other parties about a possible takeover or restructure.

WMC shares closed 39 cents or 4.3 percent higher at Aust $9.46, close to the A$9.50 price that has been mentioned in speculation of a takeover bid by Alcoa.

At one point the share price touched A$9.63. WMC shares have gained almost 47 percent since hitting a low of A$6.45 on September 21.

In a statement to the Australian Stock Exchange (ASX) Wednesday, WMC said it was in discussions "with a number of parties, including Alcoa Inc, which may lead to an offer being made to acquire all the ordinary shares in WMC, or to a restructuring of WMC".

WMC said the talks were not yet at a stage which would require disclosure under ASX listing rules.

No timing for conclusion of talks

It said it did not know when the discussions would be concluded or what the outcome would be.

WMC and Alcoa are partners in Alcoa World Alumina & Chemicals (AWAC), with WMC holding 40 percent. AWAC has bauxite, alumina and aluminium assets. Alcoa is the world's largest aluminium producer.

WMC's other mining operations cover nickel, copper and uranium. It also recently acquired a phosphate fertilizer plant in Queensland.

It said earlier this month that as part of a cost-cutting operation, it had finished selling its non-core assets, including its gold mines in Western Australia.

In August it reported a first-half net profit of A$274.3 million ($140 million) to June 30, down from A$402.7 million ($205 million) in the same period a year earlier.

WMC chief executive Hugh Morgan said then that the reduced profit result reflected lower commodity prices.