Mineral Companies That Are Great Candidates For Acquisition - NEWS STORY JUST OUT
Molycorp (MCP) is one of the world`s leading manufacturers of custom engineered rare earth and rare metal products and is vertically integrated from its world-class rare earth resource to its advanced downstream processing facilities. With 26 locations across 11 countries, the company also produces rare earth magnetic materials through its Molycorp Magnequench subsidiary, including neodymium-iron-boron (NdFeB) magnet powders, used to manufacture bonded NdFeB permanent rare earth magnets. Through its Intermetallics Japan joint venture with Daido Steel and Mitsubishi (MSBHY.PK), Molycorp manufactures next-generation, sintered NdFeB permanent rare earth magnets. Through its Molycorp Advanced Water Technologies subsidiary, the company markets and sells its proprietary, cerium-based advanced water purification technology called SorbX for use in municipal and industrial wastewater treatment, recreational water, and pool and spa water treatment markets.
The company has run into some trouble as the stock has tumbled from $35 a share to just above $7 a share over the past 10 months. However, now some are calling MCP a takeover target and it has been subject of takeover rumors. Bloomberg reported that Molycorp's low valuation and the chance to lock in rare-earth resources could spur manufacturers from Nissan Motors (NSANF.PK) to Siemens (SI) to make a bid, according to Byron Capital Markets. After expanding its refining and processing operations with last year's purchase of Neo Material Technologies, the $1.3 billion company may even appeal to private equity firms, Robert W. Baird. Goldman Sachs suggested that Molycorp could fetch $15 a share in a takeover, a 100% premium plus to the current share price. Also, on February 5 MCP's shares rose on takeover chatter.