THE North American investment bank CIBC has been recruited by Rio Tinto, the mining giant, to help strike a potential agreed £14 billion takeover of Canada’s Alcan.

Rio, which is headed by new chief executive Tom Albanese, has been looking hard at acting as white knight to Alcan, an aluminium miner, which is facing a hostile bid from Alcoa.

If Rio were to mount a bid, analysts say it would be a cash offer. To help offset the cost of the takeover, it is likely Rio would sell Alcan’s downstream assets. These include metal production and packaging businesses.

Charles Kernot, a mining analyst at Sey-mour Pierce, said: “These sort of assets could be packaged and sold to a group of private-equity buyers very easily.”

As well as recruiting CIBC, Rio is also being advised by Deutsche Bank. There is speculation that an approach could be made within two weeks.

Another potential bidder for Alcan is BHP Billiton but it is not as advanced as Rio. Mar-ius Kloppers, BHP’s new chief executive, is watching events closely. If a bidding war does erupt, experts expect any number of permutations to unfold. This could involve a bid for Alcoa or even a bid for Rio.

The mining sector has been gripped by takeover fever. There are suggestions that Mick Davis, chief executive of Xstrata, will make a move on Lonmin, the platinum miner. This has led to sharp rises in Lonmin’s share price, which closed the week at £42.77, valuing the company at £6.6 billion.

Both Albanese and Kloppers are aware that intervening in the battle for Alcoa presents them with a one-off opportunity to leap into the ranks of the world leaders in aluminium and alumina production. It would also enable them to compete against Rusal, the Russian aluminium giant that is planning to list in London later this year.

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