By Saabira Chaudhuri
Plains Exploration & Production Co. (PXP) said a large
percentage of its shareholders chose to receive stock consideration
as payment in its proposed merger with Freeport-McMoRan Copper
& Gold Inc. (FCX).
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 Co. (MMR) 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. At the same time, Freeport shares
have declined sharply since the offer was unveiled in December. A
special shareholders meeting is scheduled for Monday.
The update comes a few days after Chief Executive 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.
Shares of Plains closed Wednesday at $44.79, while those of
Freeport closed at $31.76. Both stocks were inactive in recent
premarket trading.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com
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