Wednesday, January 2, 2013

Molycorp Soars On Takeover Chatter


Shares of Molycorp, Inc. (NYSE: MCP) soared more than 10% on Wednesday on speculation that the company could be a takeover target.

Bloomberg News reported wednesda that Molycorp’s low valuation and the chance to lock in rare- earth resources could spur manufacturers from Nissan Motor Co. to Siemens AG to make a bid, according to Byron Capital Markets Ltd. After expanding its refining and processing operations with last year’s purchase of Neo Material Technologies Inc., the $1.3 billion company may even appeal to private-equity firms, Robert W. Baird & Co. said. Goldman Sachs Group Inc. projects that Molycorp could fetch $15 a share in a takeover, a 59 percent premium to its Dec. 31 close.

Molycorp, a development stage company, engages in the production and sale of rare earth oxides in the western hemisphere. Its rare earth products include oxides, metals, alloys, and magnets for various inputs in existing and emerging applications comprising clean energy technologies, multiple high-tech uses, defense applications, and water treatment technology. The company primarily owns and operates the Molycorp Mountain Pass facility, an open-pit mine containing rare earth deposits outside of China located in San Bernardino County, California. It also intends to produce and sell rare earth oxides and rare metals in Europe; and rare earth alloys in the United States.

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