Plains Exploration to Pay $3 Special Dividend if Freeport-McMoRan Deal Closes

   By Melodie Warner 
 

Plains Exploration & Production Co.'s (PXP) board declared a special dividend of $3 a share, which is conditioned upon the oil company's completed merger with Freeport-McMoRan Copper & Gold Inc. (FCX).

Plains Exploration shareholders are scheduled to vote on the deal Monday.

Freeport-McMoRan agreed in December to pay the cash-and-stock equivalent of $50 a share for Plains Exploration while also unveiling plans to acquire McMoRan Exploration Co. (MMR) for $3.4 billion in cash.

Freeport-McMoRan's intentions to acquire the two oil explorers came under fire from investors who say the tie-up is riddled with conflicts of interest as six directors will have overlapping roles at Freeport and McMoRan. At the same time, Freeport shares have declined sharply since the offer was unveiled in December. But Freeport said earlier this month it wouldn't increase its offer, ending speculation the deal might be boosted.

Plains on Monday said the special dividend will be paid immediately prior to the completion of its merger with Freeport-McMoRan, which has also approved the payout.

Meanwhile, Freeport-McMoRan's board intends to declare a supplemental $1 dividend immediately following the closing of its Plains acquisition.

Freeport-McMoRan also said it plans to complete $1.5 billion in asset sales from the combined company and will reduce its capital spending plans.

Plains Exploration shares were trading 6.7% higher at $48.60 premarket while Freeport-McMoRan shares were up 12 cents to $32.80.

Write to Melodie Warner at [e-mail]

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