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.
Simon Constable contributed to this report.

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