SAC Capital, the Greenwich hedge fund run by Stevie Cohen, says copper mining king Phelps Dodge is worth more than Freeport McMoRan Copper & Gold has agreed to pay for it, and is putting its money where its mouth is—picking up at least 5% of the companies shares. The story of SAC's investment was first reported in the New York Post. SAC confirmed its acquisition in filings with the SEC this morning.
Here's how SAC describes its plan to oppose the Freeport McMoRan Copper & Goal acquisition.
SAC Capital Associates, SAC Select, SAC MultiQuant, SAC Meridian and CR Intrinsic Investments originally acquired Common Stock for investment in the ordinary course of business because the Reporting Persons believed that the Common Stock, when purchased, was undervalued and represented an attractive investment opportunity.
The Issuer announced on November 19, 2006, that it had entered into a definitive agreement to merge with Freeport-McMoRan Copper & Gold Inc. ("FCX"). The Reporting Persons believe that the terms of the proposed FCX transaction would not provide full and fair value to the Issuer's shareholders and would deprive them of their ability to maximize the return on their investment. The Reporting Persons believe that the proposed FCX transaction offers few, if any, synergies to the combined operation, and would use the Issuer's balance sheet to fund the purchase in what is essentially a public recapitalization that would create disproportionate value for FCX shareholders at the expense of the Issuer's shareholders. In addition, the Reporting Persons believe there is unrecognized long term value that the Issuer's shareholders would forego if they sold their shares at FCX's proposed terms. Accordingly, the Reporting Persons currently intend to vote against the proposed FCX transaction.
Sac's Schedule 13D filing [SEC]