Plains: Majority of voting shareholders choose Freeport stock as merger payment
BY SAABIRA CHAUDHURI
HOUSTON -- Plains Exploration & Production Co. said a large percentage of its shareholders chose to receive stock consideration as payment in its proposed merger with Freeport-McMoRan Copper & Gold Inc.
Freeport-McMoRan agreed in December to pay the cash and stock equivalent of $50 a share for Plains Exploration, while also unveiling plans to acquire McMoRan Exploration for $3.4 billion in cash.
The deal offered Plains stockholders the right to get either cash or shares of Freeport with a value equal to the sum of about 0.6531 shares of Freeport stock and $25, subject to proration in the event cash is oversubscribed or undersubscribed.
Preliminary results show holders owning about 29% of its shares elected to receive cash and holders of close to 46% of its shares chose to receive Freeport stock. The rest didn't put in valid votes.
The company said stockholders electing to receive Freeport stock may be prorated and are expected to receive about 99% of their merger consideration in Freeport stock and the remainder in cash. Plains stockholders electing cash and those who didn't make a valid election are expected to receive all of their consideration in cash.
Freeport-McMoRan's intentions to acquire the two oil explorers has come under fire from investors who say the tie up is riddled with conflicts of interest as six directors will have overlapping roles at Freeport and McMoRan.
The update comes a few days after CEO James C. Flores urged shareholders to back the company's proposed merger with Freeport, citing the strategic nature of the transaction and the scale of the combined company, among a slew of reasons.
Dow Jones Newswires