MELBOURNE - BHP Billiton yesterday declined to comment on speculation it is preparing a bid for US aluminium producer Alcoa of the US, following Alcoa's failed offer for Canadian rival Alcan.
Shares in the world's biggest miner fell A96c to $A38.20.
Reports in London over the weekend suggestedBHP Billiton was mulling a £20 billion ($51.45 billion) takeover for Alcoa.
Such a bid would surpass the value of Rio Tinto's US$38 billion ($48 billion) offer for Alcan launched last week.
BHP Billiton said yesterday it did not comment on market speculation and rumour.
Rio Tinto's grab for Alcan, which will make it the world's biggest producer of aluminium and fourth biggest of alumina, left Alcoa in a precarious position.
Alcoa had made its own tilt at Alcan, before Alcan recommended the Rio Tinto bid.
Consolidation is still expected to ramp up in the aluminium sector amid a buoyant outlook for Chinese demand for the lightweight metal.
Alcoa's failed bid has also put a spotlight on Alumina, its 40 per cent joint-venture partner in Alcoa World Alumina and Chemicals. .
"There's a few things Alcoa can do, including buying Alumina, or Alcoa could get taken out by someone else, BHP or someone else, but all those scenarios bode well for Alumina," ABN Amro analyst Rob Clifford said.
Clifford said that, in theory, an offer by BHP Billiton for Alcoa would be a good move.
"The strategy would be good - it would make them the dominant player in alumina and allow them to be more proactive in terms of the price setting of that commodity," he said.
"I think absolutely that would be strategically a very good move, but the strategy Rio had in taking over Alcan was also very sound, but it all comes down to price."
* The Australian sharemarket regulator has put Rio Tinto under the microscope, as it examines the events leading up to the miner's offer for Alcan.
The Australian Securities Exchange, which routinely examines market disclosures by companies leading up to major announcements, said it had taken a close interest in the matter. Rio Tinto's shares lost A$4.20, or 4.15 per cent, to A$97.10 yesterday as analysts digested the whopping price tag for Alcan.
