Hedge Fund Seeks Buyer for Phelps Dodge [Barron's]
Summary: Hedge fund Atticus Management has announced that it is looking for buyers for Phelps Dodge, the third-largest U.S. copper miner and Atticus’s largest holding. Atticus’s filing closely follows the collapse of Phelps Dodge’s attempt to merge with Canadian nickel miner Inco. Atticus owns 9.97% of Phelps Dodge and has met with several private equity firms and strategic buyers in hope of an acquisition. Phelps Dodge’s share price has benefited from strong copper demand over the past five years but has dropped 12% from its May $102.80 high amid copper price worries. Atticus’s Phelps Dodge holding is valued at over $1 billion and represents 15% of its portfolio. According to BMO Capital Markets analyst Victor Lazarovici, Atticus may find it difficult to tempt a strategic buyer for Phelps Dodge because of high costs, older assets, and currency concerns.
Related links: Phelps Dodge Withdraws Bid for Inco, Opening Door for RIO • What's Next For Phelps Dodge? • Copper Price and Supply Perfectly Synched
Potentially impacted stocks and ETFs: Phelps Dodge (PD), DB Commodity Index Tracking Fund (DBC)
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