Rusal, CVRD, Mitsubishi Seen Likely Suitors For Global Alumina

VANCOUVER -(Dow Jones)- Global Alumina Corp. (GLA.U.T) said Thursday it was in discussions to sell the company to an undisclosed third party, with several rivals that hold adjacent claims to its Republic of Guinea alumina project seen as likely candidates.

"A number of companies who are already in Guinea but years away from production might want access to a more advanced operation," said one sector analyst.

Global Alumina said in a statement a sale would be engineered at $2.65 a share.

In Toronto Thursday, company shares are up 31 Canadian cents to C$2.60 on 7.0 million shares.

Global Alumina is in a four-way joint venture with BHP Billiton Ltd. (BHP), the Dubai Aluminum Co. and Mubudala Development Co. in the Republic of Guinea. A 3.2 million metric ton-per-year smelter is to be built on site.

"The project has port access, but some of the other companies which have claims in and around Global Alumina’s project don’t; they might want to get up-and-running faster by taking out Global," one analyst said.

CVRD (RIO), Mitsubishi Corp. (8058.TO) and Rusal all have adjacent claims.

Analysts said Rusal, which has recently been elevated into the global ranks of aluminum players following its merger with Sual and Glencore International AG’s (GNC.YY) alumina assets, is the odds-on favorite to take out Global Alumina.

"They’re showing interest in being a global player. They’ve shown interest in Global Alumina in the past and Rusal might be keen to get up and running on the global stage quickly," one analyst said.

He added that the Guinea alumina project presents considerable upside in that production can be ramped up to five million metric tons a year and a new plant can be built on site.