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Goldcorp seen eager to sell Silver Wheaton stake
Tue Jan 29, 2008 12:01pm ESTORONTO (Reuters) - Goldcorp Inc.

(G.TO: Quote, Profile, Research) may be on the verge of selling its 49 percent stake in Silver Wheaton Corp (SLW.TO: Quote, Profile, Research), the Financial Post newspaper said on Tuesday, while analysts agreed the timing is right for a sale.

Selling the stake could raise around C$1.8 billion ($1.8 billion), based on Silver Wheaton's stock price. The Post said Goldcorp has begun hiring investment bankers for a sale likely by way of a secondary offering.

According to Reuters data, Goldcorp owns 108 million shares of Silver Wheaton, which was at C$16.58 on the Toronto Stock Exchange on Tuesday, down 31 Canadian cents. Goldcorp was off 51 Canadian cents at C$37.93.

Goldcorp did not return calls seeking comment.

Speculation that Goldcorp might sell the stake has increased over the past year as Silver Wheaton's share price has been boosted by rising silver prices.

Barry Allan, an analyst at Research Capital Corp, said such a deal makes sense, as the market has never properly priced the value of the Silver Wheaton stake into Goldcorp's shares.

"Any time that I've ever talked about Goldcorp, people are always confused about how much is the value actually made up of Silver Wheaton shares versus fundamental underlying value of Goldcorp," he said.

Allan compared the possible sale to Newmont Mining's (NEM.N: Quote, Profile, Research) recent spinoff of mining royalty firm Franco-Nevada FNV.TO, which raised about C$1.1 billion.

"You've got a subsidiary here where you've got some huge gains built up. You can take those gains into your income statement over the next couple of quarters, where the quarters are going to be your high-cost quarters," he said.

Silver Wheaton buys and resells silver produced by several miners. Goldcorp is the world's second-largest gold producer by market capitalization.

RBC Capital Markets said in a recent note that Silver Wheaton's sharp rise over the past year -- up 40 percent on the Toronto Stock Exchange coming into the session -- makes a sale by Goldcorp more likely.

John Ing, president of Maison Placements, said Goldcorp's need for cash is also a motivation to sell.

"They have a big (capital spending) program, as they bring on huge mines, and Silver Wheaton is a logical source of funds."

($1=$1.00 Canadian)

(Reporting by Cameron French; editing by Rob Wilson

http://www.reuters.com/article/marketsNews/idCAN2960054120080129?rpc=44&sp=true