Icahn Takes Stake in Rout-Beleaguered Freeport-McMoRan

(Bloomberg) -- The billions in cutbacks that Freeport- McMoRan Inc. has taken in its battle against plunging commodity prices may not be enough for one of its newest shareholders, billionaire activist investor Carl Icahn.

Icahn amassed about 8.5 percent of the international natural resources company, the investor disclosed Thursday in a filing with the U.S. Securities and Exchange Commission.

The activist may seek board representation and intends to hold talks with the Phoenix-based company on “capital expenditures, executive compensation practices and capital structure as well as curtailment of the issuer’s high-cost production operations,” according to the filing.

The filing was released after the close of regular trading in New York on Thursday, where Freeport rose 19 percent to $12.15 at 5:23 p.m. Prior to the release, Freeport soared 29 percent after the company said in a statement it plans to cut production at some mining operations, reduce its U.S. workforce and lower capital spending next year to $4 billion from a previously forecast $5.6 billion.

Icahn’s investing firm filed a Hart-Scott-Rodino Act notice about a week ago, alerting regulators and Freeport that he intended to buy as much as 25 percent of the company, said two people familiar with the notice who asked not to be identified discussing non-public information. Icahn hadn’t held talks with management or the board as of Wednesday, Thursday’s filing states.

‘Open Dialogue’

Freeport “maintains an open dialogue with our shareholders and welcomes constructive input toward our common goal of enhancing shareholder value,” the company said Thursday in a statement e-mailed 11 minutes after Icahn’s 13D activist filing was made public. Thursday’s 13D filing shows Icahn had already begun purchasing the shares as of July 17.

Eric Kinneberg, a Freeport spokesman, and Darren McDermott, a spokesman for the company with Brunswick Group, both declined to comment beyond Thursday’s statements.


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