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Alcoa Seeks Control of Norway's Elkem

OSLO (Reuters) - Alcoa Inc, the world's biggest aluminum producer, sought to win control of partly owned Norwegian metals group Elkem with an offer to buy 7.1 percent of the shares on Wednesday. The purchase of 3.5 million shares at 175 Norwegian crowns ($23.58) each would raise Alcoa's holding in Elkem, which makes aluminum, silicon metal and ferroalloys and has about 4,000 employees, to 53.4 percent from 46.3. Alcoa made a failed bid for all of Elkem in January and is in a battle for control with Norwegian industrial group Orkla, which owns 39.7 percent of Elkem. Alcoa said in a statement that it was offering to buy the shares on a "first come, first served" basis. "We believe that Elkem is a solid long-term investment, and we would like to be in a position to set the company's future direction," Alain Belda, Alcoa's chairman and chief executive, said in a statement. Elkem shares closed on the Oslo bourse at 175.5 crowns before the Alcoa statement. At 1720 GMT, Alcoa shares were down 2.84 percent in New York at $20.17 against a 1.0 percent fall for the Dow Jones industrial average. Analysts say that smaller shareholders in Elkem might accept the offer even though it was below the last traded price, knowing that Elkem shares will be less attractive if Pittsburgh-based Alcoa reaches a 50 percent holding. Alcoa bought about six percent of Elkem last week to give it a lead over Orkla. Orkla's long domination at Elkem has so far managed to deny Alcoa any seats on the Elkem board. But Orkla has in the past signaled that it does not want to own all of Elkem. Alcoa ruled out attempting to buy out Orkla at the current price. "That's not an option," Alcoa spokesman Jake Siewert told Reuters when asked whether Alcoa might offer to buy out Orkla's holdings at 175 crowns a share. He said that Alcoa believed that Elkem shares were already artificially high after recent heavy falls for many other companies. Alcoa's bid for Elkem in January was at a lower price of 155 crowns a share, valuing the group at 7.6 billion Norwegian crowns ($1.01 billion). Both Elkem and Orkla rejected that bid, saying that Elkem was worth at least 200 crowns per share. Orkla's chief executive, Finn Jebsen, is Elkem's chairman.