SAC Capital’s unit CR Intrinsic has sent a letter to the board of Plains Exploration & Production Company (NYSE:PXP) stating that it will vote against an acquisition bid from Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). The hedge fund unit says that the deal undervalues the company according to its own analysis. The story was originally reported by Reuters earlier today.

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SAC Capital’s CR Intrinsic Outstanding Shares

SAC Capital unit CR Intrinsic, which manages about 3.8 percent of the outstanding shares in Plains Exploration & Production Company (NYSE:PXP), said any objection coming from one of the world’s most famous hedge funds is likely to be noted by other investors.

The argument made in the CR Intrinsic letter states that since the deal was struck between Plains Exploration & Production Company (NYSE:PXP) and Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), shares in similar companies have seen a rise, and Plains Exploration itself has just reported two strong quarters. To the managers of CR Intrinsic, that means that Plains is not undervalued and the outstanding offer is not suitable.

The deal that the SAC Capital unit said it would vote against would see Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) acquire Plains Exploration & Production Company (NYSE:PXP) for $25 in cash and 0.6531 share in Freeport per share. The total estimated value of that deal is $45.33 per share according to the Reuters piece. At time of writing, shares in Plains exploration were trading at $45.99, up a fraction over 1 percent for the day.

One of the problems with the valuation is the value of Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) stock. The company’s heavy basis in the metal markets have weighed on its value. Since the start of the year, shares in the company have lost almost 8 percent of their value. The acquisition price is exposed in a big way to the prices of commodities, and instability that CR Intrinsic would rather avoid.

On today’s market, those shares have increased by more than 1 percent, standing at $31.52 at time of writing. A vote will be held on May 20 to decide whether or not the company will be sold to Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX). Whether or not CR Intrinsic can convince investors to vote with them on the deal will be the driving narrative of that meeting.