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Freeport deal could ward off Glencore for Rio Tinto, analysts speculate

Oct. 10, 2014 6:11 PM ETRio Tinto Group (RIO) StockFCX, RIO, GLCNF, GLNCYBy: Carl Surran, SA News Editor9 Comments
  • Rio Tinto (NYSE:RIO) may decide that its best defense against another takeover approach from Glencore (OTCPK:GLCNF, OTCPK:GLNCY) is buying the likes of Freeport McMoRan (NYSE:FCX) in a "classic kind of defensive move," Bernstein analyst Paul Gait speculates.
  • While Rio is saying it’s better off going it alone, a deal for FCX could help it ward off any further advances from Glencore as well as provide a way to lessen its dependence on iron ore at a time when the metal is slumping, Gait says.
  • FCX "fits all the criteria of an attractive takeout candidate and would make sense for... anyone looking to increase their copper exposure and getting some very high-margin energy assets at the same time,” BB&T's Garrett Nelson adds.
  • FCX shares are now at their cheapest in more than 15 months relative to EBITDA.

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