Kaiser Aluminum Makes Public Its Bid for Alumax

Kaiser Aluminum Corp. on Thursday made public its bid for competitor Alumax Inc., in a deal valued at between $2.2 billion and $2.5 billion that would create the world’s third-largest aluminum producer.

Alumax earlier this month rejected the merger proposal from Houston-based Kaiser, which is controlled by Maxxam Inc., but it has indicated that it would consider a richer offer.

There was no immediate response Thursday from Norcross, Ga.-based Alumax.

The companies would have a combined annual revenue of more than $5 billion.

The Kaiser offer is a combination of cash and equity securities at a combined value of $40 to $45 per common share. Under the proposal, $30 would be paid in cash and the balance would be paid in Kaiser shares. There are about 55 million fully diluted Alumax shares outstanding.

Alumax stock closed at $32.50 on Thursday on the New York Stock Exchange. Kaiser made the announcement after the exchange closed. In after-hours electronic trading, traders were offering $37 a share to buy it.

On Feb. 14, Alumax sent a letter to Kaiser rejecting its offer. In that letter, however, Alumax indicated that its board would consider a price of $50 per share, or about $2.75 billion.

On Thursday, Kaiser Chairman George Haymaker Jr. said in a letter to Alumax Chief Executive Allen Born that “such values do not appear justified based on public information.” But Kaiser is willing to negotiate, Haymaker said.

“Combining Kaiser and Alumax would create a $5-billion fully integrated company with leadership positions in every stage of the aluminum industry,” he said.