- Freeport may explore cost cuts, capital reduction, asset sales
- Icahn holds about an 8.5 percent stake in the copper producer
Freeport-McMoRan Inc. is working with JPMorgan Chase & Co. to review its strategy after billionaire activist investor Carl Icahn bought a stake in the company, people familiar with the matter said.
Freeport, the world’s biggest publicly traded copper producer, may consider options including cost cuts and capital reduction plans, as well as asset sales, the people said, asking not to be identified as the information is private. Freeport’s discussions with its advisers are at an early stage and no decisions have been made, the people said.
Representatives for Freeport and JPMorgan declined to comment.
Icahn amassed about an 8.5 percent stake in Freeport, the investor disclosed in a filing with the U.S. Securities and Exchange Commission last month. The activist may seek board representation and intends to hold talks with the Phoenix-based company on “capital expenditures, executive compensation practices and capital structure as well as curtailment of the issuer’s high-cost production operations,” according to the filing.
Icahn’s investing firm filed a Hart-Scott-Rodino Act notice about a week before it went public with an activist 13D, alerting regulators and Freeport that he intended to buy as much as 25 percent of the company, two people familiar with the notice said at the time.
The Aug. 27 13D filing shows Icahn had already begun purchasing the shares as of July 17.
Activist investors buy equity stakes in publicly traded companies and push executives and directors to make changes they argue will boost shareholder returns.