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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (1404)	11/20/2006 1:08:03 PM
From: richardred	Respond to of 7242

Sector Snap: Copper Monday November 20, 12:57 pm ET Rush to Buy Copper Companies on News of the Freeport-McMoRan Offer for Phelps Dodge NEW YORK (AP) -- Shares of Copper companies got a boost Monday on news of Freeport-McMoRan Copper & Gold Inc.'s plans to buy Phelps Dodge Corp. and create the world's largest publicly traded copper company. The companies announced the $25.9 billion cash and stock deal on Sunday. Freeport-McMoRan pegged its offer at $126.46 per share, well above Phelps Dodge's Friday closing price of $95.02 on the New York Stock Exchange. Each Phelps Dodge share would be exchanged for $88 in cash plus 0.67 of a common share of Freeport-McMoRan. In Monday midday trading, Phelps Dodge shares were up $27.46, or 28 percent, to $121.48 in trading at more than triple the average daily volume on the NYSE. Earlier in the session, the stock hit a new 52-week high of $123.96. Freeport-McMoRan shares fell $1.02 to $56.38, also in trading at over three times average daily volume on the NYSE. Over the past year, the company's shares have traded between $43.10 and $72.20. Elsewhere in the sector, shares of Southern Copper Corp. rose $1.83, or 3.6 percent, to $52.13 in heavy trading on the NYSE, after climbing as high as $54 earlier in the day. In addition, shares of Ivanhoe Mines Ltd. were up 33 cents, or 3.6 percent, to $9.43, while Rio Tinto PLC gained $1.12 to $205.41, both on the Big Board. Hongyu Cai of Goldman Sachs said the offer could spark increased merger and acquisition actions in the copper sector. "The acceleration of copper industry M&A indicates producers' confidence in the extended cycle for copper as well as the difficulties in securing assets and developing new projects," Cai wrote in a note to investors. "We would not be surprised to see counter bids for Phelps Dodge or other M&As in the industry." Cai kept his "Buy" rating on Freeport-McMoRan, but took the company off his firm's "Americas Conviction Buy" list, saying shares will come under pressure as a result of the bid. biz.yahoo.com