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Leigh Baldwin & Co.

112 Albany Street, Cazenovia, NY 13035 | Phone: (315) 655-2964 Toll Free: 1-800-659-8044

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Diamonds and Dogs

12/5/12

The Diamond and Dog of an acquisition:

Freeport-McMoran Copper & Gold Inc. (FCX)

Freeport-McMoran is not a golden stock today, down 15.99% at $32.16. The exploration and mining company saw its shares crash after news was released that the company was expanding into the energy sector. Freeport said that it would enter the energy sector through a $9 billion purchase of two oil and gas producers. The company said it would purchase the Plains Exploration Co. and McMoran Exploration Co. for $6.9 billion and $2.1 billion, respectively. The addition of the two companies will create a natural resources conglomerate with assets ranging from oil rigs in the Gulf of Mexico to mines in Indonesia. However, Freeport will also assume around $11 billion in debt. Investors feel the cost will outweigh the benefits, thus Freeport is
getting beat up today.

McMoran Exploration Co. (MMR)

McMoran Exploration investors struck gold today, up 87.17% at $15.84. While the buyer in this acquisition is getting crushed today, the company being purchased is exploding higher. Under the terms of the agreement, McMoran Exploration shareholders will be entitled to receive $14.75 per share and would also receive 1.15 units of a royalty trust for each share they hold. McMoran Exploration gained $7.38 today pushing the stock up near its 52-week high of $16.34. Note: Plains Exploration, the other acquisition of Freeport-McMoran is also up 23.50% at $44.52.
Diamonds and Dogs market commentary is a journal of daily observations on anything that happens to be of interest to our author. Obviously, our primary focus is the stock market and world economic events, but for this page we have no defined topics. We want this page to be dedicated to the interests, concerns, and possibly to the financial gain of our clients and friends. All comments contained herein are for informational purposes only, and should not be considered as a solicitation to buy or sell any security. The firm does not guarantee the accuracy or completeness of the information or make any warranties regarding results from it's usage.