Investors pile into Freeport on restructure hopes
Copper and gold giant Freeport-McMoRan (NYSE:FCX) was trading higher as much as 6.7% on Tuesday with already more than 28 million shares in the owner of the iconic Grasberg exchanging hands by midday.
The Phoenix-based company announced on Tuesday that it's trimming its board and is reviewing its oil and gas business in a return to its roots as a copper-focused miner.
The announcement of "alternative courses" for the oil division which could include an outright sale comes less than three years after Freeport acquired Plains Exploration Production for $6.9bn and bought back for $3.4bn in cash McMoRan Exploration, a deep sea drilling company, which it spun off 18 years ago.
The news comes not longer after it was revealed that activist investor Carl Icahn has taken up a substantial stake in the business.
Last month Freeport, which vies with Chile's state-owned Codelco as the world number copper miner in terms of output, became the first major copper miner to announce its slashing capex and production to cope with the depressed copper price.
That led to a huge surge in the stock which after today's rally is worth $13.2 billion, but year to date Freeport has been decimated with shares down by half.
At the time of the oil and gas investment in December 2012 Freeport was worth more than $30 billion.