Phelps Dodge Rebounds
Representatives from Icahn Associates and Third Point Capital were unavailable for comment.
To be sure, many of Phelps Dodge's big institutional investors support the deal. According to some sources who attended a meeting in Boston last week with Phelps executives, a number of big shareholders are slowly getting on board. It's entirely conceivable that the rally in Phelps' shares is a sign investors are buying into the wisdom of the marriage of a giant copper producer with two nickel ore miners.
Opponents of the deal still have a lot of obstacles to overcome, even if more activists do show up to fight the merger. One huge hurdle is Wall Street firm Morgan Stanley (MS), the fourth-largest Phelps Dodge shareholder, according to recent filings, with a $605 million stake.
Morgan Stanley has a big stake in seeing the merger work. The firm is not only a major Phelps shareholder, but also the adviser to Inco on the transaction. According to a merger proxy statement filed on Thursday, Morgan Stanley's investment bankers were the driving force behind the three-way deal.The filing shows that in mid-May, Ramiro Peru, the CFO of Phelps Dodge, called representatives at Morgan Stanley and told Inco's advisers that the firm would be "open to discussing how it might assist Inco to respond to the hostile bid for Inco made by [rival firm] Teck Cominco." At the time, Inco and Falconbridge were both fending off suitors of their own, and Phelps Dodge offered itself as a so-called white knight to Inco. The following week, a representative at Morgan Stanley called Peru back and suggested the combination of Inco, Falconbridge and Phelps Dodge. With Morgan Stanley as both the deal's engineer and as one of the largest shareholders, it is unlikely to take a stand against the deal's completion.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV