Paris - Pechiney, Europe's second-biggest aluminium maker, said yesterday its board rejected for a second time as insufficient a takeover offer from Canada's Alcan that would create the world's biggest aluminium company by sales.

Alcan's new proposal equalled e47 (R376.94) to e48 a share. An original offer made on July 7 was currently worth e44.43 a share and was still in force, said Dan Gagnier, a spokesperson for Alcan.

It was confident that offer would succeed, Alcan said.

"The name of the game is to get more money, not block the bid altogether," said Harry Purcell, a fund manager at F&C Management in London.

"I suspect a moderately higher bid will put a lot of pressure on Pechiney's board to accept it."  

Aluminium makers have been combining to cut costs as global production reaches record levels. Pechiney and Alcan combined would have annual sales of $23.7 billion, based on 2002 figures, eclipsing Pittsburgh-based Alcoa's $20.2 billion in revenue.

"The new proposal constitutes an improvement of the terms of Alcan's offer, but continues to fall short of Pechiney's true strategic value," Pechiney said.

The two companies had held talks on the new proposal, which have now ended, Alcan said.

Pechiney said the new offer did not take into account changes in the exchange rate between the US dollar and the euro that would help its earnings. The US accounted for about one-third of sales and it reported in euros.