NEW YORK (HedgeWorld.com)–Atticus Management LLC informed the management of Phelps Dodge Corp., Phoenix, in a letter Wednesday [Feb. 15] that it won’t accept a seat on the Phelps Dodge board of directors.
Atticus contends that Phelps Dodge, a smelter and refiner of non-ferrous metals, has too much cash on its balance sheet, and that it ought to give some of this back to the shareholders.
“The recent dividends have not gone far enough to address the company’s bloated balance sheet,” said Atticus’ chairman, Timothy R. Barakett, and its vice chairman, David Slager, in the letter addressed to Phelps Dodge chairman, J. Steven Whisler.
Messrs. Barakett and Slager said that they would prefer to be outside the (12 member) board, where they can continue to be a more effective voice for shareholder interests than they could be with one seat on the inside. The letter also criticized the incumbent board members for a failure to put their own money where their execution is. It said that the members “neither own a significant investment in Phelps Dodge nor have to date shown any great interest in engaging with us …”