Freeport-McMoRan Inc. (FCX) Surges As Carl Icahn Receives Two Board Seats

Let’s refocus our discussion on the recent agreement between the two parties. Under the terms of the agreement, Andrew Langham and Courtney Mather have been appointed to Freeport-McMoRan Inc. (NYSE:FCX)’s Board of Directors. The former has served as General Counsel of Icahn Enterprises L.P. since January and previously acted as Assistant General Counsel, while the latter has been a Managing Director since April 2014. This move comes after the company reduced its Board size to just nine members from 16 earlier this week. Icahn has declared that he is satisfied with the agreement, which also stipulates that the company cannot implement any poison pill defense strategies. In a press release on his website, the activist investor also asserted that two seats on the Board would be enough to unlock shareholder value at the company, as he and his team have done so many times in the past.

Earlier this week, Freeport-McMoRan disclosed its intentions to find strategic alternatives for its oil and gas business that could enable it to “achieve self-funding” from its own resources and cash flows. One of the options that the company is considering is a potential public offering of a minority interest in the business. Freeport-McMoRan reckons that the high quality of its oil and gas holdings, the potential of its Deepwater Gulf of Mexico infrastructure, and its highly-experienced workforce represent great assets that might create value.

Considering that the world’s largest publicly-traded copper producer has seen its stock surge on today’s announcement, it might be foolish to disregard a potential investment in the stock. Even though Freeport-McMoRan has been operating in a low-price commodities environment lately, the stock appears to be trading at an attractive level at the moment.

Disclosure: None