Ann: Alcoa 2012 2nd Quarter Results , page-17

I cannot seriously see Alcoa making an offer for Alumina. Why would they? You've got to remember that in the eyes of Alcoa this little company in Australia is used as an off-book funding source. Alumina is not a real company. It has no operational control over its business. Alcoa is the operating partner with a 60-40 ownership structure in the AWAC business. What it says goes. So if they need money for a new venture, like the big Saudi Arabia development they're currently a part of, they give Alumina the option to participate in the venture. 'Option' ... remember what Alcoa wants is what happens, the independence of the AWC board has always been an issue raised in the Australian media.

For Alcoa to take over Alumina they'd need to undertake a capital raising of their own. Those billions they have in the bank are to fund its current projects. Are the US fund managers and bankers going to be happy with that. No way. Alcoa's stock price is low. The managers won't lower that further.

So the current situation remains. AWC is an off-book funding source for Alcoa projects. The best bet for a take over is from a chinese firm, lets say if Alcoa wants a new partner. But why would they. This is a cheap funding source and why would anyone want to buy a business that they have no operational control of. So I can't see it.

It's still a trading opportunity - maybe quite a profitable one (though I am skeptical of this because everyone expects it) - but I'd wait for the stock price to start moving up again.