North Is Proving Frosty for Phelps Dodge

Phelps Dodge(PD Quote) is running into stiff opposition in its efforts to sell an ambitious northward expansion to Wall Street this week.

The copper giant's management got a rude reception Tuesday in New York during a meeting with a group of top institutional investors to pitch the planned three-way acquisition of Inco(N Quote) and Falconbridge(FAL Quote). The combined stock-and-cash deal, valued at $40 billion, would add a whopping $17 billion of debt to Phelps Dodge's balance sheet.

People who attended the meeting say a top portfolio manager with Lehman Brothers'(LEH Quote) Neuberger Berman asset management group loudly denounced the three-way merger, calling it a bad move for Phelps Dodge shareholders. S. Basu Mullick, the manager of Neuberger's $2.1 billion Partners Fund, argued the deal would add too much debt to Phelps Dodge's balance sheet and be dilutive to future earnings, attendees told TheStreet.com. ...