At 10.30am on Tuesday morning Australian time, this story was posted on The Times website in the UK.
It was completely unsourced and all over the place in making various wild claims including that:
- BHP wanted to buy Alcoa for $50 billion.
- Rio Tinto wanted to buy Alcoa for $50 billion.
- Alcoa had outgoing BHP Billiton CEO Chip Goodyear and his two heirs apparent, Chris Lynch and Marius Kloppers, on a wish list to become CEO.
The response was extraordinary as Alcoa shares rocketed $US2.09 to $US34.99, propelling the Dow more than 100 points higher on Tuesday night.
Sure, Alcoa’s shares have underperformed and its CEO is retiring next year, but does anyone really think the famously disciplined Rio Tinto or BHP-Billiton are about to launch the biggest takeover in mining history at the very top of a resources boom?
Besides, with the climate change debate getting incredibly hot all over the world, why would you buy Australia’s and arguably the world’s largest consumer of electricity?
Aluminium is the most energy intensive metal known to man and the industry has long been embroiled in controversy over secretive and subsidised power supply arrangements from the first world to the third.
The Times and The Sunday Times are Rupert Murdoch’s most credible newspapers – but they’ll suffer brand damage as time passes without an Alcoa bid. Like crying wolf, you can only do this so many times.
The Sunday Times was recently subjected to this humiliating attack by The New York Times over a story which claimed an American scientist, Professor Charlie Roselli, was conducting cruel experiments to “cure” gay sheep in a “program that critics fear could pave the way for breeding out homos-xuality in humans”.
It was pure science fiction but, like the Alcoa takeover story, was picked up all over the world.
Printing such pap isn’t going to help turn around the finances of both papers, as they continue to bleed about $200 million a year, as this story on The Times website yesterday explains.
Making matters worse was the decision of The Australian to back its sister paper yesterday with a front page follow-up to the Alcoa story – invoking memories of the famous Mark Westfield “Heineken to buy Foster’s” splash.