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DOING SOME DIGGING – More on Canada’s Take-Over Soap Opera

This summer's longest running story, the soap-opera-like tale of corporate take-over and counter-offers, shows no s...


This summer’s longest running story, the soap-opera-like tale of corporate take-over and counter-offers, shows no signs of going away. It began last March with the announcement that Vancouver-based WHEATON RIVER MINERALS and IAMGOLD CORP. of Toronto planned a merger that would create a million-ounce gold producer. Together they would rate a spot among the world’s 10 largest producers.

The deal was attractive, so attractive that that counter-offers were made by COEUR D’ALENE MINES of Idaho for Wheaton and by GOLDEN STAR RESOURCES of Colorado for IamGold. The outside offers had the desired effect in that they derailed the merger.

However, the boards of both Wheaton and IamGold continued to spurn their suitors, repeatedly telling shareholders that the Coeur and Golden Star bids were not in their best interests.

IamGold struck a deal with GOLD FIELDS of South Africa. The transaction will create a global gold powerhouse. This move finally persuaded Golden Star to withdraw its offer. Things at IamGold appear to have settled down comfortably with the new Gold Fields relationship and name.

Meanwhile, to make itself less attractive to Coeur d’Alene which is the world’s largest primary silver producer, Wheaton announced that it would spin off its silver assets into a company called SILVER WHEATON. And the Wheaton board continues to recommend that its shareholders not tender their shares to Coeur. But Coeur says it remains committed to the take-over of Wheaton River, offering a premium above Wheaton’s $3.51 closing price on September 3. Coeur has set September 30 for the receipt of tendered Wheaton shares. Coeur’s continued wooing has forced Wheaton to push back the closing of Silver Wheaton to October 15.

And that is the saga to this point. IamGold and Gold Fields appear to be getting on with business. Wheaton and Coeur d’Alene continue sniping while analysts opine.

I’m sorry I can’t predict the outcome of the Wheaton-Coeur tussle. Time will tell if the final deal is in the best interests of both companies. CMJ will, however, publish a more in-depth look at the conclusion of this story in our December 2004 issue if the situation is settled by then.


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