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Further consolidation in gold mining companies Original Source Link: (May no longer be active)
http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6998363http://olympics.reuters.com/newsArticle.jhtml?type=businessNews&storyID=6998363
Goldcorp Agrees to Buy Wheaton River
Sun Dec 5, 2004 08:13 PM ET
NEW YORK (Reuters) - Canadian mining company Goldcorp Inc. (G.TO: Quote, Profile, Research) (GG.N: Quote, Profile, Research) plans to buy competitor Wheaton River Minerals Ltd (WRM.TO: Quote, Profile, Research) (WHT.A: Quote, Profile, Research) for $2.09 billion in stock, marking further consolidation in the mining industry, the companies said Sunday in a statement.
The friendly offer follows a failed hostile $1.8 billion takeover bid by silver producer Coeur d'Alene Mine Corps (CDE.N: Quote, Profile, Research) for gold and silver miner Wheaton River. Wheaton River repeatedly rejected that offer and in September, Coeur d'Alene threw in the towel.
Goldcorp's bid opens another chapter in the merger saga that began in the mining industry early this year when Canada's Iamgold Corp. (IMG.TO: Quote, Profile, Research) tried to merge with Vancouver-based Wheaton River.
After that deal was scuttled by the Coeur d'Alene bid, Iamgold arranged a deal with South Africa's Gold Fields Ltd (GFIJ.J: Quote, Profile, Research) , which is now in danger because of a hostile bid for Gold Fields from South African competitor Harmony Gold Mining Co. (HARJ.J: Quote, Profile, Research)
Goldcorp Chief Executive Officer Robert McEwen, who announced in September that he planned to step down, said he would cede his CEO title to Wheaton River CEO Ian Telfer.
He told Reuters in an interview that unlike some of the failed deals out there, his bid for Wheaton River was a friendly one.
"I'd like to say it's going to be completed as quickly as possible, but the industry is consolidating. Most of the companies out there have more money in their treasury," McEwen said.
He said that the deal, which would create the eighth-largest gold producer worldwide, could close as early as the end of February.
The deal will help diversify Goldcorp, whose mines are located in the United States and Canada, McEwen said. Wheaton River has mines in Argentina, Mexico and Australia and two development projects in Mexico and Brazil.
TERMS OF THE DEAL
Toronto-based Goldcorp plans to offer 1 share for every 4 shares of Wheaton River, which it said was a 7 percent premium to the company's average closing stock price for the past 30 days on the Toronto Stock Exchange.
The deal values Wheaton shares at C$4.29 ($3.58) compared with their recent closing price of C$3.76 ($3.14) on the Toronto Stock Exchange, based on Dec. 3 closing share prices.
Together the two companies expect 2005 gold production of more than 1.1 million ounces and forecast growth to 1.5 million ounces by 2007. It said its proven and probable reserves would be 10.5 million ounces.
Goldcorp said that it must acquire at least 66.66 percent of Wheaton River's shares based on Canadian securities laws in order to assure that it can acquire the entire company.
It also said it agreed to a $35 million termination fee.
Goldcorp is being advised by GMP Securities Ltd and Fraser Milner Casgrain LLP. Wheaton River's advisors are Merrill Lynch and Davies Ward Phillips & Vineberg.
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