Stephen Simpson, CFA
Mon, Feb. 22, 10:33 AM
- Freeport McMoRan (FCX +12.1%) soars ~12% in early trade to lead the S&P 500, as copper futures and other base metals surge.
- The LME’s three-month copper contract was up 1.4% at $4,686/metric ton after hitting a two-week high earlier in the session at $4,701, maintaining its price momentum after closing above $4,600/ton last week for the first time in almost two weeks.
- Positive trading sentiment on copper was upheld by China’s announcement that it will reduce deed and business taxes for home buyers in a bid to speed up home sales and reduce the glut on the property market; weak Chinese property sales have been bad for copper prices, as the sector accounts for most of the demand for the metal.
- Meanwhile, Bloomberg's David Fickling thinks BHP Billiton (BHP +5.9%) ought to buy FCX: BHP's copper output would more than double overnight and control of all three of the world's biggest copper pits - Escondida, Grasberg and Morenci - while a deal also would make sense for FCX, "whose debts are dragging it dangerously close to the plughole."
- ETFs: JJC, DBB, CPER, BOM, RJZ, BOS, JJM, BDD, CUPM
Oct. 10, 2014, 6:11 PM
- 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.
Oct. 6, 2014, 4:38 PM
- Franco-Nevada (NYSE:FNV) agrees to acquire a gold and silver stream on production from the Candelaria and Ojos del Salado mines in Chile from Lundin Mining (OTCPK:LUNMF, OTC:LUNCF) upon completion of the acquisition of Candelaria by Lundin from Freeport McMoRan (NYSE:FCX).
- FNV will provide an up-front deposit of $648M to acquire the gold and silver stream and will subscribe for up to C$50M in Lundin's planned subscription receipts financing.
- FNV -0.9% AH.
Feb. 12, 2014, 9:59 AM
- Traders are lining up bets that Augusta Resource (AZC +2.3%) will win a higher offer than HudBay's (HBM +3.2%) recent unsolicited bid of C$2.96/share - ~C$540M including net debt -
- AZC’s Rosemont copper project in Arizona is large enough to attract other producers including OZ Minerals (OZMLF) and Teck Resources (TCK), Laurentian Bank of Canada says, estimates the company’s value is at least C$3.89/share based on similar deals.
- Freeport McMoRan (FCX) is another possible suitor with the financial strength to outbid HBM, according to National Bank Financial.
- “HudBay’s offer has little chance of success at its current valuation,” says a Toronto Dominion analyst.
Jun. 3, 2013, 3:10 PM
May 20, 2013, 10:07 AM
Paulson & Co., whose funds own ~9.9% of the outstanding shares (12.8M) of Plains Exploration (PXP +7%), says it will vote in favor of Freeport McMoRan's (FCX -0.9%) proposed takeover of PXP and McMoRan Exploration (MMR) as it "adds another avenue for growth, diversifies its cash flows, and increases the proportion of earnings from the United States."| May 20, 2013, 10:07 AM
May 17, 2013, 11:23 AM
While a razor-thin margin one way or the either is anticipated in next Monday's vote on Freeport McMoRan's (FCX) takeover bid for Plains Exploration (PXP), FCX shares could be poised to rise on either outcome. But all bets are off if FCX sees the bid on the verge of defeat and decides to sweeten the pot after saying it wouldn't do so. A higher offer could further pressure shares, already -16% since the deal was announced.| May 17, 2013, 11:23 AM
May 13, 2013, 9:09 AM
Plains Exploration (PXP) CEO James Flores urges shareholders to back the proposed merger with Freeport McMoRan (FCX) ahead of the May 20 shareholder meeting, citing the strategic nature of the transaction, the financial and operational strength of the combined businesses, and the expected lower borrowing cost. Flores also criticizes analyses provided by ISS and Glass Lewis, which oppose the merger.| May 13, 2013, 9:09 AM | 1 Comment
May 9, 2013, 8:25 AM
Freeport McMoRan (FCX) reiterates its support for its proposed acquisition of Plains Exploration (PXP) and that the agreed terms are the "best and final" offer. PXP says the financial and operational strength of the combined businesses will allow for accelerated value creation across the entire asset portfolio. FCX +1.3%, PXP -2.6% premarket.| May 9, 2013, 8:25 AM
May 8, 2013, 3:18 PM
Freeport McMoRan's (FCX +2.7%) planned acquisition of Plains Exploration (PXP) likely will close in June despite objections, Morgan Stanley predicts as it maintains an Outperform rating on the shares. Long-term FCX shareholders should be rewarded with strong growth through 2015 and lower political uncertainty, the firm says, adding that copper inventories are starting to decline.| May 8, 2013, 3:18 PM | 1 Comment
May 7, 2013, 2:29 PM
May 7, 2013, 12:13 PM
Proxy advisory firm ISS becomes the third financial outfit to come out against the proposed $6B takeover of Plains Exploration (PXP +2.2%) by Freeport McMoRan (FCX +0.4%). The FCX offer is too low, ISS says, adding that "even at the announcement day valuation of $49.55, the transaction would offer little or no takeover premium to the current stand-alone value." (earlier)| May 7, 2013, 12:13 PM | 3 Comments
May 6, 2013, 2:12 PM
SAC Capital unit CR Intrinsic says it will vote against Freeport McMoRan's (FCX +1.2%) pending acquisition of Plains Exploration (PXP +1.1%) because it undervalues the company. CR says shares of PXP's peers have risen since the deal was announced, and that PXP has reported two operationally strong quarters. CR says its affiliates and funds it manages own ~3.8% of PXP.| May 6, 2013, 2:12 PM
Apr. 25, 2013, 12:23 PM
Freeport McMoRan (FCX +1.2%) has been under pressure to raise its offer for Plains Exploration (PXP -1.4%), but Deutsche Bank's Jorge Beristain thinks that could change after Anadarko reported lower-than-expected results from its Phobos well. The announced 250 net feet for the project roughly equates to 250M boe, far below market expectations of ~500M and DB estimates of 600M, Beristain says.| Apr. 25, 2013, 12:23 PM
Apr. 18, 2013, 12:11 PM
Analysts say Freeport McMoRan (FCX +1.4%) may need to raise its buyout bid for Plains Exploration (PXP +1.8%) to secure support from PXP stockholders ahead of initial drilling results from the key Phobos project in the Gulf of Mexico. Since the ~$50/share buyout was announced, FCX shares have slid 24%, reducing the value of the deal to ~$44/share.| Apr. 18, 2013, 12:11 PM | 7 Comments
Jan. 24, 2013, 5:57 PM
Freeport-McMoRan's (FCX) $9B deal to buy two energy companies has prompted the unusual step from shareholders of the acquiring company to go after their own directors for overpaying; more typical are class actions from shareholders of target companies who say the purchase price is too low. Six FCX directors also on MMR's board will reap $131M for their stock in near-bankrupt MMR, according to lawsuits.| Jan. 24, 2013, 5:57 PM | 7 Comments