Atticus Capital Buys More Phelps Dodge
08/04/06 - 12:20 PM EDT
Lauren Silva
But many shareholders remain opposed to Phelps doing any deal at this time, given that it had little debt and generates a high cash-flow.
Atticus did not comment on its filing and intentions with regard to Phelps. But many on Wall Street are wondering what Atticus will do next. Atticus has always believed the copper company could best serve its shareholders by either buying back stock or putting itself up for sale. In fact, Atticus has been nagging Phelps Dodge since February to reconsider its capital structure and issue debt in order to buy back stock. But Phelps Dodge has stubbornly defended its position in the most recent bidding war, despite Atticus' considerations over the past half of the year. "Atticus has consistently recommended short-term strategies based on their own objectives," the company said in a statement in mid-July. "Our board of directors, which has carefully considered all of Atticus' suggestions, has concluded unanimously that our agreement with Inco is a superior path to creating shareholder value in both the long run and the short term." Atticus is regarded as one of the most shrewd investment shops on Wall Street. Atticus, which manages six different funds, was up more than 20% last year, say knowledgeable people. Investors expect its returns to be at least that high again this year. The fund was started by Timothy Barakett, a former hockey player turned Wall Street baron, who happens to be one of the highest-paid traders on Wall Street. Last year, he ranked 19th on Trader Monthly's top 100 traders. His salary topped $100 million. Meanwhile, Atticus continues its love affair with stock exchanges. The company increased its stake in the New York Stock Exchange(NYX Quote - Cramer on NYX - Stock Picks) to $773 million, or 11.3 million shares, up from 9.4 million shares that the company reported in May. In addition to the NYSE, Atticus has significant holdings in two more of the world's biggest exchanges: the Euronext and Deutsche Boerse. The three exchanges also have recently been tied up in a bidding war.
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