“Freeport-McMoRan Copper & Gold Inc. (FCX) is offering the best deal in copper for mining companies willing to bet big on the metal.
Freeport, the world’s largest publicly traded copper miner, is valued at 3.3 times its earnings before interest, taxes, depreciation and amortization in 2013, according to analysts’ estimates compiled by Bloomberg. That’s cheaper than any other base metals producer with more than $10 billion in market value and about a third less than the median, the data show.
While Freeport faces the first back-to-back slump in annual earnings after workers at its Indonesian mine went on a three- month strike and copper prices fell from a record on concern over a slowdown in China, analysts say its Ebitda next year will rebound to an all-time high as demand recovers. Freeport could now attract Rio Tinto Group (RIO), its partner inIndonesia, according to Adrian Day Asset Management. A deal would also give BHP Billiton Ltd. or Anglo American Plc (AAL) a company that produces 10 percent of the world’s copper, Oracle Investment Research said.
“Freeport has probably the most attractive assets in the world with its copper mine in Indonesia,” Jean-Francois Comte, co-founder of Lutetia Capital, a Paris-based hedge fund that bets on mergers and acquisitions, said in a telephone interview. “Anybody who believes that would probably look at it.”
Eric Kinneberg, a spokesman for Freeport, declined to comment on whether it would consider a sale or has been approached about an acquisition. The Phoenix-based company had a market capitalization of $35 billion yesterday….”
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