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Freeport-McMoRan Copper & Gold Inc
McMoRan Exploration Co
Plains Exploration & Production Co
Freeport-McMoRan Copper & Gold Inc. (FCX) investors told a judge the company may be paying too much for McMoRan Exploration Co. (MMR) and Plains Exploration & Production Co. (PXP), countering other claims that shareholders are being shortchanged.
Lawyers for a retirement fund and a bank asked Delaware Chancery Court Judge John W. Noble to put on hold a series of lawsuits in which investors are seeking more money for their shares, pending an investigation into whether Freeport’s bids, totaling more than $10 billion, are excessive.
“We believe that there is a credible basis to believe that Freeport is dramatically overpaying for its acquisitions” in order “to improperly benefit Freeport’s chairman and certain other insiders,” lawyer Michael J. Barry wrote in a letter to Noble today.
Barry represents shareholders the City of Roseville Employees’ Retirement System and Amalgamated Bank, trustee for a group of LongView investment funds.
In one of the earlier complaints, an investor seeking to sue on behalf of all McMoRan common stockholders contends that the oil and natural gas company’s board violated its duty to get a better price in the $3.4 billion transaction.
He asked a judge to stop the deal under its present terms and to award damages and legal fees.
In another suit, an investor contends Plains is worth more than Freeport’s offer of about $6.9 billion in cash and stock.
Freeport, based in Phoenix, said in a statement Dec. 5 that it would buy New Orleans-based McMoRan for $14.75 a share and 1.15 units of a royalty trust. Freeport separately is buying Houston-based Plains for $25 in cash and 0.6531 Freeport share for each Plains share, according to court papers.
Eric Kinneberg, a Freeport spokesman, didn’t immediately respond to a request for comment on Barry’s letter.
Freeport fell 0.9 percent to $33.78 at 2:43 p.m. in New York. The shares earlier dropped as much as 1.3 percent.
The initial cases are Krieger v. McMoRan, CA8091, and Rice v. Plains, CA8090, Delaware Chancery Court (Wilmington).
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