Cramer on Freeport-McMoRan, plus a trade idea originally appeared on BloggingStocks on Tue, 20 Mar 2007 11:24:00 EST. Please see our terms for use of feeds.

On 14 March 2007, Phelps Dodge Corporation (NYSE:PD) was acquired by Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) to form the world's largest copper mining company. The purchase price was $26 billion. Now that is a whole lot of pennies. $6 billion of the purchase price stems from bonds issued by FCX. Phelps Dodge shareholders will receive $88 in cash for each share of PD common stock, plus 0.67 of a share of FCX's common stock for each share of PD common stock. PD shareholders will pocket a total of $18 billion in cash. This works out to $125.53 per share of PD common stock. Shares of PD closed at $127.93 on 15 March 2007, up $2.22 per share. For its part, FCX shareholders authorized an increase in the number of shares of FCX common stock available from 423.6 million to 700 million.

Phelps Dodge has been on a tear lately reporting 4Q 2006 record net income of $1,324.3 million, or $6.50 per share for the quarter. Compare that figure to 4Q 2005 net income of $121.3 million, or 60 cents per share. 4Q 2006 price of copper per pound averaged $3.19 on the New York Commodity Exchange, compared to $2.02 for 4Q 2005.

Total 2006 net income exceeded $3 billion, bouyed in part by strong prices for copper and molybdenum, as well as by new mining operations at the Cerro Verde mine in Peru, the Safford mine in Arizone, and the Tenke Fungurume in the Democratic Republic of the Congo.

Phelps Dodge acquired for $26 billion originally appeared on BloggingStocks on Fri, 16 Mar 2007 14:42:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Genesis Microchip Inc (NASDAQ: GNSS) was downgraded to Sell from Hold at Roth Capital, citing the loss of significant market share, and to Market Weight from Overweight at Thomas Weisel following the company's disappointing earnings report.

• Columbia Sportswear Co (NASDAQ: COLM) was downgraded to Sell from Hold at Matrix USA based on valuation.

• Calyon downgraded Gentex Corp (NASDAQ: GNTX) to Sell from Neutral.

• Following the company's fourth-quarter report, Buckingham downgraded International Flavors & Fragrances Inc (NYSE: IFF) to Neutral from Accumulate.

• Bank of America downgraded Clear Channel Communications Inc (NYSE: CCU) to Neutral from Outperform with a $37 target, as shares are pricing a best-case scenario of a deal and sees downside risk if the deal falls apart.

• Following fourth-quarter results and reduced guidance, Friedman Billings downgraded shares of Phelps Dodge Corp (NYSE: PD) to Market Perform from Outperform with a $125 target.

Analyst downgrades 1-30-07: Columbia Sportswear was left out in the cold originally appeared on BloggingStocks on Tue, 30 Jan 2007 10:40:00 EST. Please see our terms for use of feeds.

Before the bell 1-29-07: Futures change direction ahead of busy week originally appeared on BloggingStocks on Mon, 29 Jan 2007 08:01:00 EST. Please see our terms for use of feeds.

Even though it's a smaller company, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) has made a $25.9 billion bid for Phelps Dodge Corp. (NYSE:PD). If the deal closes, the new entity will be the largest publicly-traded copper company worldwide.

It's certainly a nice deal for shareholders of Phelps Dodge. The offer is for about $126 per share -- a nice premium to Friday's close of $95.02.

Interestingly enough, it appears this was a fairly quick deal (about a couple weeks). Then again, for companies of this size, it is not easy to keep things confidential.

The deal means Freeport-McMoRan would be taking on a lot of debt. Then again, the debt markets are quite frothy right now. Besides, Freeport-McMoRan knows how to generate strong cash flows, which will help to pay-down the debt load.

Besides being accretive on the short-run, the long-term prospects of this deal look good as well. After all, China and India are undergoing major growth, which should mean a big need for copper. To fulfill this growing need for copper, Freeport-McMoRan needs a highly scalable global platform. And Phelps Dodge is certainly a great fit.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

Phelps Dodge hits a $25.9 billion mother lode originally appeared on BloggingStocks on Mon, 20 Nov 2006 10:21:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY: Phelps Dodge (PD) and MGM Mirage (MGM) top today's small list of initiations.

• Phelps Dodge Corporation (NYSE:PD) was initiated with a Sector Outperformer at CIBC and a $125 target. CIBC believes the company will continue and possibly expand their $2B shareholder capital return program.
• FTN Midwest initiated MGM Mirage (NYSE:MGM) with a Buy and $57 target. They are positive on MGM's best in class assets.

OTHER INITIATIONS:

• First Albany initiated Joseph A. Banks (NASDAQ:JOSB) with a Neutral, citing the lack of near-term catalysts for its rating.
• UBS initiated Allied Waste Industries, Inc. (NYSE:AW) with a Buy and $15 target.
• Credit Suisse reinstated KLA-Tencor Corp. (NASDAQ:KLAC) with a Neutral.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst initiations 10-24-06: Phelps Dodge and MGM Mirage originally appeared on BloggingStocks on Tue, 24 Oct 2006 11:21:00 EST. Please see our terms for use of feeds.

Cramer is hungry: YUM, McDonald's, Darden good, Phelps Dodge to $100 originally appeared on BloggingStocks on Thu, 12 Oct 2006 15:12:00 EST. Please see our terms for use of feeds.