Oct. 4 (Bloomberg) — New York hedge fund Atticus Capital LLC boosted its stake in Phelps Dodge Corp., the world’s second- biggest copper producer, and demanded the mining company use an estimated $2.5 billion cash surplus to buy back stock.
A “multibillion” share buyback “offers a return on equity superior to most capital expenditures,” Atticus Chairman and Chief Executive Officer Timothy R. Barakett said in a letter to Phelps Dodge CEO J. Steven Whisler that was filed with U.S. regulators. Atticus said it accumulated an 8.6 percent stake in Phelps Dodge and is the second-largest shareholder.
Whisler, 51, is investing in mines to increase metals output as copper prices surged 26 percent in the past year to the highest ever. Phoenix-based Phelps Dodge’s profit tripled in the second quarter, to a third straight record, amid climbing industrial demand for copper and higher sales of fabricated metal.
