Seeking Alpha

It's official: Freeport McMoRan (FCX) will acquire Plains Exploration (PXP) for ~$6.9B in cash...

It's official: Freeport McMoRan (FCX) will acquire Plains Exploration (PXP) for ~$6.9B in cash and stock, and acquire McMoRan Exploration (MMR) for ~$3.4B in cash, or $2.1B net of 36% of the MMR interests currently owned by FCX and PXP. MMR +74.3%, PXP +25.2%, FXC -13.2% premarket.
Comments (15)
  • bigbenorr
    , contributor
    Comments (734) | Send Message
     
    Isn't it funny how JP Morgan downgraded this stock very recently and now they are handling the financing for this transaction....
    5 Dec 2012, 09:02 AM Reply Like
  • TFCAB
    , contributor
    Comments (1942) | Send Message
     
    i know i know, the analysts and M&A divisions dont have anything to do w/ one another
    5 Dec 2012, 09:05 AM Reply Like
  • bigbenorr
    , contributor
    Comments (734) | Send Message
     
    I wonder if they are allowed to attend parties with each other....
    5 Dec 2012, 09:20 AM Reply Like
  • rjj1960
    , contributor
    Comments (1359) | Send Message
     
    FCX would of been better off grabbing CLR.
    5 Dec 2012, 09:06 AM Reply Like
  • ComputerBlue
    , contributor
    Comments (681) | Send Message
     
    Buyin FCX on the dip?
    5 Dec 2012, 09:12 AM Reply Like
  • Energysystems
    , contributor
    Comments (944) | Send Message
     
    I think so, Blue. Trading relatively close to 52 wk low. Yielding 3.8% at this price.
    5 Dec 2012, 09:38 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
     
    I like FCX less here. It's paying a high premium for MMR, even though each report out of Davy Jones seems worse. PXP is probably a good deal, but will take years and years and billions in investment to determine. Also, imo, this puts an end to the takeover chatter that circles around FCX a few times a year, which will weigh on the stock a little bit in the near term.
    5 Dec 2012, 10:31 AM Reply Like
  • bigbenorr
    , contributor
    Comments (734) | Send Message
     
    "each report out of Davy Jones seems worse"

     

    True, and I have repeatedly been disappointed by the slow progress, but keep in mind that MMR was once part of FCX and the directors have some firsthand knowledge of what is going on with the ultra-deep prospects. Even if DJ1 is weak due to all the complications, the next 2-3 wells should be easier to complete and more productive. Also, the premium seems high now, but only 2 weeks ago MMR was trading in the high 12's so 14.75 seems cheap from there. In fact I wonder if any other companies might be interested at that price, although perhaps not since no others have the strong ties that FCX does. The X factor here is the royalty trust to be created, how much value will it add?

     

    Also, to clarify I am not buying FCX either. But I thought about it....
    5 Dec 2012, 10:39 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
     
    I thought about it too, but there are energy names I like more than either MMR or PXP, so it seemed less like a bargain. Time will tell.
    5 Dec 2012, 01:35 PM Reply Like
  • jbr1
    , contributor
    Comments (3) | Send Message
     
    EXXI is of real interest here. $50 of hydrocarbons in the ground plus thedir interests in all of MMR's ultra-deep. Once ultra-dee is proved out to be only a moderate success, this a $75 stock. GREAT management.
    5 Dec 2012, 09:28 AM Reply Like
  • Crude Oil Trader
    , contributor
    Comments (309) | Send Message
     
    One of our core positions, hold and add. FCX the new BRK.B? LOL
    5 Dec 2012, 09:44 AM Reply Like
  • dougelza
    , contributor
    Comments (4) | Send Message
     
    A special dividend would've been greatly appreciated, more so than these acquisitions.
    5 Dec 2012, 10:23 AM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Again: From a risk-arb point: is FCX now trading at a steep discount? The market seems to think these deals were a 15% hit. Can someone provide the rationale (math).
    5 Dec 2012, 11:30 AM Reply Like
  • jbr1
    , contributor
    Comments (3) | Send Message
     
    Owner/portfolio manager of hedge fund and private equity investment management firms for approximately 30 years. Invest in deep discount and special situations.
    5 Dec 2012, 02:58 PM Reply Like
  • westiestn
    , contributor
    Comments (2) | Send Message
     
    I got my shares before FCX split several years ago, so I'll stay in, and maybe buy more.
    6 Dec 2012, 06:04 AM Reply Like
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