Wheaton River sticks to Iamgold bid
By August Cole, CBS.MarketWatch.com
Last Update: 5:57 PM ET May 31, 2004
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SAN FRANCISCO (CBS.MW) -- Wheaton River Minerals said Monday that its board of directors rejected a $1.8 billion bid from Coeur d'Alene Mines and told shareholders to endorse a merger with Iamgold.
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Wheaton River said that it thinks Iamgold's (IAG: news, chart, profile) (CA:IMG: news, chart, profile) offer has "the best prospects for long term value." The Coeur d'Alene (CDE: news, chart, profile) offer would dilute to the company's cash flow and has more risks, Wheaton River said.
Wheaton River also said in a statement that Golden Star Resources' (GSS: news, chart, profile) (CA:GSC: news, chart, profile) bid for Iamgold was turned down by the company.
Shares of Wheaton River (WHT: news, chart, profile) (CA:WRM: news, chart, profile) ended Friday down 1 cent to $2.91.
Wheaton River will hold a shareholder meeting to vote on the deal on June 8.
On Friday shares of Coeur d'Alene and Golden Star fell sharply on Friday after the markets weighed the competing bids.
Golden Star said it would give Iamgold 1.15 Gold Star common shares for each Iamgold common share -- a premium of 13 percent to Iamgold shareholders based on Thursday's closing prices for the stocks on the Toronto Stock Exchange. The deal's value, based on the TSE closing prices, is about $883 million ($1.21 billion Canadian).
Golden Star said in a statement it has an agreement with Coeur d'Alene whereby Coeur d'Alene will pay Golden Star $26 million if Golden Star's deal for Iamgold, and Coeur d'Alene's offer for Wheaton both succeed.
Coeur d'Alene's offer for Vancouver-based Wheaton (WHT: news, chart, profile) (CA:WRM: news, chart, profile ), which equates to around $3.28 per share, includes $1.9 billion in equity, $133 million in assumed debt, less $174 million in cash, Idaho-based Coeur d'Alene (CDE: news, chart, profile) said.
That's a 14 percent premium to Wheaton's Thursday closing price and a 25 percent premium over its 20-day average, according to Coeur d'Alene.
"Out combination creates the fourth-largest North American precious metals company, increases Coeur d'Alene's primary silver production by 45 percent, and creates a top 10 global gold producer with among the lowest cash costs of production in the industry," said Dennis Wheeler, Coeur d'Alene's chief executive, in a statement.
Wheeler made the proposal on behalf of Coeur d'Alene in a letter sent to Ian Telfer, Wheaton's chief executive, on Thursday.
Shares of Coeur d'Alene closed at $5.06, up 3 cents, Wheaton's stock closed up 6 cents at $2.92, and Iamgold's shares rose 9 cents to close at $5.43.
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